Missed Insurance Coverage Turns Costly for Long-Time Client
Missed Insurance Coverage Turns Costly for Long-Time Client
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In a challenging outcome for a long-standing customer, a car owner has faced rejection in his bid for damage compensation after it was established that his insurance coverage had been terminated over five years before the incident.
The episode came to light following a collision on April 26. When the man sought compensation from IAG, the insurance provider refuted the claim, identifying that his policy officially lapsed without renewal on April 8, 2019.
The customer contended he hadn't received any reminders or notifications regarding the renewal lapse. Emphasizing his loyalty, he mentioned his impressive track record of 18 years as a customer who consistently managed renewals punctually.
IAG countered his assertion by pointing to their records, which indicated that a renewal statement demanding a premium of $1036 had been broadcast among a massive batch of 11,163 documents for processing on March 9, 2019. Verification revealed the dispatch took place between March 11 and March 12, followed by Australian postal deployment on March 13.
Referring to a critical legislative factor, IAG underlined that the Insurance Contracts Act of 1984, through section 58, mandates at least 14 days' notice for renewal. Despite this, the legislation stipulates a cover ceiling of up to 12 months even where renewal communications falter - a window far exceeded in this scenario.
Evaluating the dispute, the Australian Financial Complaints Authority (AFCA) noted that under the Evidence Act 1995, the expectation was for the mail to reach its destination by March 22 - equating to a seven-day post from mail lodgment to receipt and allowing the customer ample grace before the renewal deadline.
AFCA further confirmed the absence of any refutation from the customer regarding this mailing timeline, reinforcing the lack of convincing testimony related to possible mail service disruptions impacting the delivery within his locality.
"The policy became void due to non-renewal five years preceding the claimed damages," affirmed AFCA. "A notional statutory policy, even if hypothetically existent, would have surpassed expiration over four years before the documented loss. Thus, no legitimate or statutory policy substantiation ties to IAG for the claim in question."
This case taps into the broader importance of consumers vigilant about policy end dates and renewal communications, spotlighting a harsh reality faced by the consumer after years of prior satisfactory engagement with the insurer.
Published:Monday, 9th Dec 2024 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
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Professional indemnity: An insurance that provides cover for liability incurred in the course of exercising a profession.