'Loyal customer for 46 years' loses dispute over expired policy

An elderly driver who sought cover following a collision with another vehicle will not be compensated after a dispute ruling determined she did not have an active policy.

The complainant lodged a claim with IAG after she was involved in a collision on February 12. The third-party vehicle had been insured also by IAG, which sought recovery for the damage from the complainant.

IAG said the woman’s policy expired on November 12 last year after she failed to pay the renewal premium and declined cover for her claim.

The complainant said she never received any notices from her insurer reminding her that she had to renew her policy. She said she often received mail that was not meant for her and would return it to the sender.

She also noted that she had previously paid for two policies for the same vehicle for two years in November 2020 – which she had been refunded for – and that the insurer quoted an incorrect address in its Australian Financial Complaints Authority (AFCA) submissions.

IAG provided the hearing with documents that showed that the renewal notice document had been sent to a mailing house on October 9 last year and was printed and lodged with Australia Post on October 12, which would have been presumed to be received at the address by October 21.

AFCA said the insurer’s documents showed that the letter “was correctly addressed to the complainant at her nominated address, which is also the same address she has provided to AFCA”.

“I accept the insurer quoted an incorrect address in its AFCA submissions. However, this is not determinative of the outcome as the renewal notice was correctly addressed,” the ruling ombudsman said.

The ruling determined that IAG had complied with sections 58 and 72 (a) of the Insurance Contracts Act 1984 by providing the insured ample time to pay the fee.

“I acknowledge the complainant says she regularly receives mails that are not meant for her,” it said.

“Leaving aside no proof was given of this, it does not automatically imply mails meant for her were not sent to her.

“There is also no persuasive evidence her mails were lost or that they have been returned to sender.”

AFCA acknowledged the difficult situation for the complainant, who had been a “loyal customer for 46 years and never missed a payment or made a claim,” but said the insurer was not required to “reinstate a policy or meet a claim when a policy has validly expired without renewal”.

The complainant asked for compensation for the insurer’s actions, saying that they had caused her “anxiety, lack of sleep and stress”.

“She says she is nearly 80 years old, on a pension, and cannot afford to cover the third party vehicle’s damage,” the ruling said.

AFCA found the insurer had not acted “in a manner that warrants compensation,” but said IAG should consider whether the claimant was qualified for hardship assistance and offer her aid if she was.

Click here for the ruling.