Obligation to offer info: what do it’s a must to inform your car insurance firm? – Mozo.com.au
Insurance is all about risk. When you take out car insurance, your risk as a customer is assessed based on factors such as the type of car you drive, your driving report, history of insurance claims and a number of statistical demographic details.
While each provider may have slightly different requirements for what to tell them, it is this disclosure of information that makes it possible to set insurance terms and premiums.
When you sign or renew an insurance contract, you are legally making a promise that the information you have provided is true and correct. When you make an insurance claim, the provider will review this information to ensure that you have complied with your reporting requirements, and therefore with the terms of the original contract, before deciding whether or not to accept the claim.
However, according to the consumer protection group Financial Rights Legal Center, this is a flawed system. In its October 2021 report, the group argues that governments and the insurance industry should work together to automate insurance disclosure when it comes to an individual's driving and insurance claims.
They say this is necessary because many people do not understand questions or terms that may be asked in insurance documents and inadvertently provide incorrect information that can result in claims being rejected. The same goes for simply forgetting or misplacing records on important details.
Financial Rights analysis found that auto insurance claims were the most common non-disclosure disputes handled by the Australian Financial Complaints Authority (AFCA), with three-quarters involving non-disclosure of driving, criminal or insurance history.
Of the cases decided by the AFCA, around 80% were in favor of the insurers.
A recent recommendation by the Royal Commission to replace “disclosure” with a requirement to use “reasonable care in avoiding misrepresentation” has been implemented by the government to address these issues.
However, the Financial Rights Legal Center says this is still open to errors and that automated data pre-fill would be a better solution. The report notes that similar systems already exist and points to companies using the Service NSW online portal to access information on driver failure points when issuing compulsory motor vehicle liability insurance (CTP) in NSW.
Through an external survey, the group found that the majority of Australians would share their driving records (71%) and insurance history (73%) through an automated data system.
Why are some auto insurance claims denied?
As noted above, some insurance claims may be denied because you mistakenly identified yourself as the driver when purchasing or renewing a policy, which will void your insurance coverage.
Other motor insurance claims may be denied because the event that caused the damage you are claiming is not listed as "insurable" in your policy. Likewise, if during an incident you were engaged in any other activity that could void your coverage, your claim could be denied.
This can include a number of specific events and actions, from driving under the influence of alcohol or drugs to leaving another driver behind the wheel if they are in a category that is specifically not covered by your insurance (z). As a reminder of the basics, here are a few things that are usually not covered by car comprehensive insurance.
What can I do if my car insurance claim is denied?
If your car insurance claim is denied, first contact the complaints or internal dispute resolution department of your insurance company. Having the ability to resolve the issues that led to your claim rejection in-house can save you time and hassle.
If you are stuck on this path and you still believe you are eligible for an insurance benefit, you can file the complaint with AFCA. This is a free and independent service that leads to a binding decision, i. H. Your insurance company must adhere to the AFCA's decision and pay the claim if it is deemed valid.
If even this does not lead to the judgment you are seeking, you can take your insurance company to court. Keep in mind, however, that this comes with legal costs and therefore can only be considered for significantly larger claims that are worth the money and hassle.
If you are not satisfied with the way your insurance company or other policy details handle your claim, consider switching car insurance. First, compare the functions of the options below for comprehensive vehicle insurance.