The case involved a trucking company that purchased a commercial motor vehicle policy from NTI. The policy application, completed through a broker, indicated that the company had two years of prior insurance history. However, it was later revealed that the company had been operating for only 19 months and had no previous insurance coverage.
In May 2024, the company's truck was stolen, prompting a claim under the NTI policy. Upon investigation, NTI discovered the discrepancies in the insurance application and declined the claim, refunding the premiums paid. The insurer argued that had the accurate information been provided, they would not have offered coverage.
The trucking company contested this decision, leading to a review by AFCA. The authority found that the misrepresentation of the insurance history was significant and that a reasonable person would not have declared two years of prior insurance when none existed. AFCA concluded that the company breached its duty of disclosure, justifying the insurer's denial of the claim.
This ruling serves as a stark reminder for businesses and individuals in the transport sector about the necessity of providing truthful and accurate information when applying for insurance. Misrepresentations, whether intentional or accidental, can lead to denied claims and financial losses. It is essential to work closely with brokers and insurers to ensure all disclosures are correct, thereby safeguarding coverage when it is most needed.
