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Young Driver Left Uncovered Due to Policy Misstep

Young Driver Left Uncovered Due to Policy Misstep

Young Driver Left Uncovered Due to Policy Misstep?w=400
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.

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

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