Young Driver Left Uncovered Due to Policy Misstep

1

The father's insurance policy, originally designed when only his daughter, a driver over 25, was listed, was auto-renewed without updates regarding his son's driving status. Despite years of loyalty to the insurer, the father argued for leniency, attributing the oversight to an honest mistake. He felt that, given their longstanding relationship, Hollard should have accommodated his needs.

The situation was escalated to the Australian Financial Complaints Authority (AFCA) after the 21-year-old rear-ended another vehicle. The policyholder not only faced damage costs to his own car but also covered approximately $15,000 in third-party repairs while providing an invoice for hire car expenses.

AFCA's findings confirmed that the claimant had been informed of the policy details at inception and renewal, which explicitly excluded drivers under 25. The claimant neither updated the mandatory age terms nor added his son as a covered driver. Section 54 of the Insurance Contracts Act was considered but deemed inapplicable, as the oversight had no bearing on the incident itself.

Despite acknowledging the honest mistake, AFCA stated it remained the customer's responsibility to review and adjust policy documents to reflect any changes in coverage requirements. The insurer, having adhered to the policy guidelines, is under no obligation to honour the claim.

This ruling underscores the critical need for policyholders to vigilantly manage insurance documents to ensure accuracy in coverage. Regular reviews and updates are essential, particularly when circumstances change or when auto-renewals occur, safeguarding against unintended lapses in protection.

Published:Thursday, 5th Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Regulatory Bodies Demand Clarity on Duration-Based Insurance Premiums 06 Jun 2025: Paige Estritori Australia’s leading financial regulators, the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA), have raised concerns regarding the practice of duration-based pricing in life insurance products. They have emphasised the need for insurers to improve transparency, ensuring that consumers are fully informed about the long-term costs associated with initial premium discounts. - read more

Young Driver Left Uncovered Due to Policy Misstep 05 Jun 2025: Paige Estritori A policyholder faces a denied claim after inadvertently excluding his newly licensed 21-year-old son from his car insurance policy, highlighting a common oversight in age-specific exclusions. Following a collision involving his son, who recently earned his licence, Hollard Insurance declined the claim based on policy terms that excluded drivers under 25, unless accompanied by a qualified adult. - read more

NSW Floods Highlight Critical Insurability Crisis 05 Jun 2025: Paige Estritori Recently, New South Wales has been severely affected by major floods, with damages to around 10,000 homes and businesses. The Insurance Council of Australia has already received over 6,000 claims from the Mid North Coast and Hunter regions, while countless families face displacement as their homes become uninhabitable. - read more

Ride-Share Driver Prevails in Insurance Dispute Over Vehicle Use 04 Jun 2025: Paige Estritori A ride-share driver recently won a significant claim dispute against an insurer that initially denied his claim following a traffic accident. The Australian Financial Complaints Authority (AFCA) sided with the driver, determining that Auto & General could not prove he misrepresented his vehicle use when purchasing his insurance policy. - read more

Streamlining Life Insurance: New Digital Questionnaire Initiative Launched 04 Jun 2025: Paige Estritori In a groundbreaking development for the Australian life insurance sector, a new digital initiative promises to simplify the process of providing medical information for life insurance applications. The collaboration between Acenda, formerly known as MLC Life, and EQ Pathology introduces “smart” digital questionnaires to streamline data collection. - read more

Record Highs in UK Pet Insurance Payouts Reflect Rising Vet Costs 03 Jun 2025: Paige Estritori The landscape of pet insurance in the UK has marked another milestone, with payouts reaching an unprecedented £1.23 billion ($2.36 billion) last year. This 4% increase over the previous year is attributed to soaring veterinary fees, reflecting broader inflation trends in the industry. - read more