Help: my claim has been declined because of nondisclosure or misrepresentation 

What is nondisclosure or misrepresentation?

Within the context of the Australian insurance industry, nondisclosure or misrepresentation refers to the withholding of material information or the provision of false or misleading information by the insured party when applying for coverage or making a claim. 

Under the Insurance Contracts Act 1984, an insured party has a duty to disclose all material facts to the insurer when applying for coverage. A material fact is any fact that would influence the insurer’s decision to accept the risk or the terms on which it will accept the risk. This includes any information that is relevant to the policy, such as the nature and extent of the risk being insured, the use of the property or vehicle being insured, and the past history of the insured party or the property or vehicle being insured. 

If the insured party fails to disclose a material fact, or provides false or misleading information, the insurer may be entitled to avoid the contract or reduce the amount of the claim. This means that the insurer is released from its obligations under the contract and is not required to pay the claim in full or at all. 

Nondisclosure or misrepresentation can occur intentionally or recklessly. It is generally considered intentional if the insured party deliberately withholds or misrepresents information in order to obtain coverage or a larger claim. It is considered reckless if the insured party is aware that the information is material and fails to disclose it or provides false or misleading information, without intending to deceive the insurer. 

In order to avoid a contract or reduce a claim due to nondisclosure or misrepresentation, the insurer must demonstrate that the insured party violated its duty of disclosure and that the nondisclosure or misrepresentation was material to the risk being insured. The insurer must also demonstrate that it would not have accepted the risk or would have done so on different terms if the material information had been disclosed. 

What can I do about it?

If you have made an insurance claim in Australia and it has been denied or reduced because of nondisclosure or misrepresentation, there are several steps you can take to try to resolve the situation and potentially have your claim reinstated or paid in full. 

First, it is important to review the terms and conditions of your insurance policy, as well as the notice of claim denial or reduction that you received from your insurer. This will help you understand the specific reason for the insurer’s decision and whether it is based on a violation of the policy terms or the Insurance Contracts Act 1984. 

If the insurer’s decision is based on a violation of the policy terms, you may be able to challenge the decision by demonstrating that you did not intentionally or recklessly withhold any material information or provide false or misleading information. For example, you might be able to show that you did not know or could not reasonably have been expected to know that certain information was relevant to the policy, or that you provided the information to the best of your knowledge and belief. 

If the insurer’s decision is based on a violation of the Insurance Contracts Act 1984, you may be able to challenge the decision by demonstrating that the insurer did not comply with its obligations under the Act. For example, you might be able to show that the insurer did not fully and fairly disclose the policy terms and conditions, or that it acted in bad faith by denying or reducing your claim without a valid reason. 

What information do I need to challenge the insurer?

Know your rights.

It is important to document all of the relevant facts and circumstances if you believe that your claim has been wrongly denied or reduced because of nondisclosure or misrepresentation. 

This might include copies of any relevant documents, such as your insurance application, policy documents, and claim form, as well as any correspondence with the insurer. You should also gather any evidence that supports your position, such as witness statements, medical records, or repair estimates. 

If your claim has been declined or avoided because of nondisclosure or misrepresentation, you are entitled to legal representation and Littles can help you. 

If you have already lodged a claim and it has been rejected by a superannuation fund or insurer, you may be entitled to have the decision reviewed through an internal resolution procedure. 

If you are unable to resolve the dispute with the insurer directly, you may be able to seek external dispute resolution through a government or industry-based dispute resolution scheme. 

If your complaint has been upheld, you may be able to litigate in a court or lodge a complaint with the Australian Financial Complaints Authority (AFCA). 

AFCA provides an independent and impartial forum for resolving disputes between consumers and insurers. To use a dispute resolution scheme, you will need to fill out a complaint form and provide copies of all relevant documents and evidence. The scheme will then assess your complaint and try to facilitate a resolution between you and the insurer. If the dispute cannot be resolved through the scheme, you may be able to pursue legal action. 

There are strict time limits to challenge an insurer’s decision, so it’s important you seek legal advice as soon as possible. 

What is the Littles difference?

Put simply, Littles are experts in superannuation and insurance law matters. 

Our insurance team has helped thousands of consumers claim their entitlements, and our Head of TPD and General Insurance has extensive industry knowledge and insight on how to maximise your prospects of success. 

We also speak your language, at sixteen languages and counting.  Forget paying for a translator or for a lawyer who doesn’t understand you and your cultural background. 

All our superannuation and insurance law matters are conducted on a no win, no fee basis, and we don’t charge you upfront for any disbursements necessary to prosecute your claim.  

If you would like superannuation and insurance law advice, reach out to Littles today by using our free Claim Checker

About the author

Littles’ Head of TPD and General Insurance, Rowan McDonald, is an expert in insurance and superannuation law.  Rowan is an experienced litigator and has prosecuted thousands of successful insurance claims for consumers. 

Having worked in the insurance industry for over fifteen years, Rowan has an extensive industry contact list and regularly presents to disability support groups, financial industry professionals and multicultural organisations. 

Rowan has also advised some of Australia’s top insurers, giving him unrivalled insight into the claim process from all perspectives.  Rowan takes a pragmatic and common-sense approach to the advice he provides his clients. 

For your free, personal consultation get in touch with Rowan today.  

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