Motorcyclist who parked in street, not garage, misses theft payout

A man whose motorbike was stolen from the street outside his home after he had told his insurer it would be parked in his garage has lost a claim dispute.

The HDI Global customer told the Australian Financial Complaints Authority (AFCA) the insurer did not make clear the critical nature of how the motorbike was stored and should not have declined his claim, but the ombudsman rejected that argument.

“I do not accept this. The insurer clearly asked how the bike was stored,” the ruling said.

“The insurer is entitled to rely on the answer being given by the complainant to a specific question and to take the answer being given to be true and it is the complainant’s responsibility to ensure it is true.

“If the insurer had known about the bike being street parked it would not have insured the complainant and therefore, would not have paid anything for the claim.”

At policy inception, HDI’s website asked “Where is the bike stored?” with options including “In The Garage”, which the motorcyclist selected.

Another option was “Street Parked” which HDI said he should have answered and by not doing so, breached his duty of disclosure. It declined the claim on the basis he did not disclose and misrepresented the correct parking location.

“The complainant incorrectly said the bike was stored in the garage when it was ‘Street Parked’. This was a breach of the complainant’s duty,” AFCA said.

“The insurer would not have offered insurance and would not have been on risk at the time of the claim had the complainant answered, ‘Street Parked’. Therefore, the insurer has been prejudiced by the complainant’s non-disclosure to the full extent of the claim.”

He told AFCA selection of “In The Garage” was unintentional, and also that the motorbike was parked interchangeably between the garage and the street, and had he been made aware the bike had to be stored in the garage he would have ensured it was more often.

AFCA said this did not change the fact HDI was not required to pay the claim, and also that HDI did not have an obligation to disclose it did not provide coverage to street parked bikes before asking underwriting questions.

“The complainant may have provided the incorrect answer unintentionally or innocently however, an unintentional or innocent non-disclosure or misrepresentation is still a non-disclosure or misrepresentation and a breach of the complainant’s duty.”

The man said the motorcycle was normally parked on the street because he only has one parking space at his unit which was used for his car. HDI claim notes indicated he said the motorbike was parked in the garage for the first couple of days and he occasionally parked it in the visitor car space, but it was generally parked on the street.

“I am satisfied, on balance, the complainant knew the bike would be parked on the street when he answered the insurer’s question,“ the ombudsman said. “If selection of ‘In The Garage’ was unintentional then it can be reasonably inferred the bike was not stored in the garage.”

See the full ruling here.