Driver loses traffic offences disclosure dispute after blaming broker

A Mercedes Benz owner has lost a dispute after blaming a broker for a failure to disclose traffic offences that caused an insurer to decline cover following an accident.

The Australian Financial Complaints Authority (AFCA) says in a decision in favour of Arthur J Gallagher that the broker did breach their duty of care by failing to “take and record contemporaneous notes” on discussions, but that had not caused the complainant’s loss.

The claim for damage to the 2015 Mercedes Benz C63 AMG was declined as the insurer said if it had known the man’s driving history included five traffic offences between 2016 and cover inception in February 2021, it wouldn’t have offered a policy.

The complainant, who was asking the insurer to pay a total of $216,320, said the broker representative didn’t ask him about his driving history before the policy began, and as a result had breached its duties and hadn’t provided service consistent with the code of practice.

The representative says he specifically remembers inquiring about the driving history and licence suspensions at the time of arranging the policy.

AFCA says the broker didn’t take notes at the time of the conversation and “in the panel’s view by failing to take and record contemporaneous notes, the broker has breached its duty of care to the complainant”.

In June that year, the driver lodged a claim, and a form was emailed back to the broker which included the answer “no” after a question on traffic offences, fines or infringements.

In a response to AFCA, the complainant initially denied completing the form, then later said he was asked by the broker for details on the car’s make and model and registration and, given the limited information required, he’d instructed his employee to complete the form.

AFCA says that based on available information its adjudication panel isn’t satisfied the complainant’s recollections are accurate.

“The panel is satisfied, on balance, the broker likely asked the complainant the question regarding the complainant’s driving history prior to policy inception,” it says.

“Based upon the answers the complainant provided in the claim form, the complainant, at that time, also likely answered ‘no’ to the broker’s question regarding the complainant’s driving history.”

AFCA says that while the broker’s failure to adopt best practice and take and record contemporaneous notes is not satisfactory, it was not that failure that led to a loss being suffered by the complainant.

“Hence, the broker is not liable for the complainant’s loss,” it says.

The sum that had been sought by the complainant comprised $154,900 for the Mercedes Benz market value including modifications, $19,920 in vehicle storage costs and $41,500 for hire car rental.

The decision is available here.