AFCA clears broker in dispute over speeding driver's disclosure duty

A BMW Coupe 3 owner whose claim for vehicle damage was declined because he did not provide his relevant driving history of speeding offences, and blamed his broker for not advising him of his disclosure duty, has lost his dispute.

The Australian Financial Complaints Authority (AFCA) says Metrix Insurance is not liable for the complainant’s loss, ruling the broker did not breach its duty of care when it arranged his comprehensive motor policy in April 2019 and renewed the cover the following year in March for another 12 months.

The complainant argued that the broker never made clear the importance of disclosing demerit points, and that it is not reasonable to expect an individual to know this.

But AFCA says it is clear from the available information that he was made aware that traffic infringements/offences were relevant to the broker’s ability to obtain insurance for his vehicle.

When the policy was incepted in April 2019, following an email from the complainant requesting Metrix Insurance to arrange the policy, the broker sent him his insurance schedule, product disclosure statement and a Brokers Financial Services Guide.

In the email to the complainant about the inception of the policy, he was told to read the insurance schedule, which includes information on what he had disclosed regarding his driving history.

The document also explained his disclosure obligations and the consequences of failing to comply with these obligations. One of the consequences is that his benefit in the event of a claim may be impacted if incorrect details such as driving offences and licence suspensions were provided.

Metrix Insurance secured the policy after requesting further information and reconfirming details previously provided by the complainant under a separate policy whilst completing a fresh Fact Find document.

The 2019 Fact Find document noted “no infringements” within the required driving history disclosure period when in fact at that point he had four driving offences. He had six offences by the renewal in March 2020. All were for speeding, and each resulted in one demerit point.

AFCA says the driver would have been considered an acceptable risk to the insurer with four offences, but not with six, as confirmed by underwriting guidelines.

“The policy documentation is clear in informing the complainant of his duty of disclosure, of the information he had disclosed during the fact-finding processes and the broker’s request for the complainant to confirm that the information provided is correct,” AFCA says in its ruling of the dispute.

“I am satisfied that the complainant, despite being made aware by the broker of the importance of disclosing his prior driving history, has failed to do so.”

When the policy was due for renewal in March 2020, the broker again emailed the complainant a month in advance his insurance policy documents and he was reminded in a follow-up email confirming the policy had been renewed and his duty of disclosure.

He was told if his circumstances over the past 12 months have changed or additional information such as driving infringements have not been made known, that he must let them know as it “is important to your policy and may be relevant to your insurer’s position regarding the renewal”.

The complainant did not dispute receiving the relevant policy documentation from the broker but says he does not read the fine print and/or terms and conditions sent to him as this is what he employs the broker for, to undertake these tasks and arrange insurance cover for his property.

But AFCA says the complainant, despite being made aware by the broker of the importance of disclosing his prior driving history, failed to do so.

“It is for this reason the insurer has denied the claim. I do not accept the complainant’s failure to disclose this was the broker’s fault,” AFCA says.

Click here for the ruling.