Homeowner Successfully Challenges Insurer in Disclosure Dispute

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

According to Auto & General Services, it denied the claim for flood damage because the homeowner failed to disclose that he had been running an air conditioner and refrigerator retail business from the shed. The insurer pointed out that during the most recent policy renewal, the homeowner confirmed that no part of the property was used for business activities or for buying, selling, or storing business products or equipment.

The homeowner admitted to operating a business out of the shed but argued that he was not required to disclose the details because the policy specifically excluded coverage for business and farming structures, including sheds. He emphasized that the policy referred to the insured dwelling as a "freestanding house" and that any losses to the shed were covered by a separate business insurance policy.

The Australian Financial Complaints Authority (AFCA) sided with the homeowner, stating that the home and contents policy did not cover the shed and it was fair for him not to disclose the business. AFCA ruled that when the homeowner answered the insurer's question about whether any part of the "property" was being used as a business premises, he understood the question to refer only to the freestanding residential dwelling where he lived. AFCA also noted that the certificate of insurance specifically mentioned the freestanding home and did not include any reference to outbuildings or sheds.

As a result of the ruling, Auto & General is now required to accept the claim and appoint a qualified expert to prepare a scope of works for repairs to the insured property. The insurer must arrange and complete the repairs or provide a cash settlement with a 15% contingency. AFCA has also instructed Auto & General to assess the homeowner's entitlement to temporary accommodation benefits and reinstate his policy.

Published:Saturday, 9th Dec 2023
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Survey Highlights Alarming Number of Australians Travelling Uninsured

16 Feb 2026: Paige Estritori

Recent research conducted by the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade (DFAT) has unveiled a concerning trend: approximately 14% of Australian travelers embark on international journeys without any form of travel insurance. This statistic has prompted industry leaders to urge Australians to reconsider the importance of securing adequate coverage before traveling abroad. - read more

IAG's Impressive FY25 Performance and Strategic Outlook for FY26

16 Feb 2026: Paige Estritori

Insurance Australia Group (IAG) has reported a notable 4.3% increase in gross written premium (GWP), reaching $17.1 billion for the fiscal year 2025. This growth is accompanied by a net profit after tax of $1.36 billion, marking a significant rise from the previous year's $898 million. The company's reported insurance profit stands at $1.74 billion, with a margin of 17.5%, and a return on equity improving to 19.4%. Shareholders are set to benefit from a full-year dividend of 31. - read more

Potential Decrease in Australian Insurance Premiums Amid Global Market Downturn

16 Feb 2026: Paige Estritori

Recent developments in the global financial markets have sparked discussions about potential benefits for Australian insurance policyholders. A significant sell-off in the insurance sector on Wall Street has led analysts to speculate that Australian insurance premiums could see a reduction in the near future. - read more

NSW Court Decision Escalates Liability Risks for Construction Industry

16 Feb 2026: Paige Estritori

A recent landmark ruling in New South Wales has significantly altered the liability landscape for the construction industry. The court's decision removes the ability for developers and builders to rely on proportionate liability defences under the Design and Building Practitioners Act 2020 (DBP Act), thereby increasing their exposure to claims related to building defects. - read more

Rising Public Liability Insurance Premiums Challenge Australian Businesses

16 Feb 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has released its latest National Claims and Policies Database (NCPD) statistics, revealing a substantial increase in public liability insurance premiums over recent years. According to the data, premiums have risen by 40% since 2015, a rate that surpasses general inflation and places additional financial strain on businesses across the country. - read more

Click for more Insurance News