Ride-Share Driver Prevails in Insurance Dispute Over Vehicle Use

1

The driver, who had returned to ride-share work after a lengthy hiatus, was involved in an accident shortly after completing a passenger drop-off. When filing a claim, the driver faced refusal from Auto & General, which cited discrepancies in his policy. The policy depicted the vehicle as designated for “private and commuting” purposes, not for ride-share work.

Auto & General argued that had it known about the vehicle’s use for ride-sharing, the policy would not have been offered. They based their refusal on records showing the driver’s registration with Uber in 2019 and subsequent admissions to doing ride-share work intermittently. Nevertheless, AFCA concluded that such evidence did not substantiate active ride-share use during the time the policy was incepted.

AFCA's examination highlighted that no Uber activity occurred between March 2020 and August of the following year, aligning with the driver’s statement that he resumed service only in October 2024, coinciding with the day of the incident. Moreover, documentation indicated the vehicle was not actively used for Uber when the insurance policy took effect.

AFCA noted that the policy stipulated notifying changes to vehicle use promptly but deemed a few days reasonable for such disclosures. Therefore, the ruling favored the driver, requiring Auto & General to honour the claim, cover hire car expenses, and compensate the driver $1500 for stress due to the initial rejection.

Auto & General's defense cited that their policy excludes claims incurred while carrying passengers for hire. However, AFCA found this inapplicable since the accident occurred post-drop-off with no fare-paying customers present. Although instructed to process the claim, the insurer retains the right to terminate the policy post-claim acceptance.

This decision underscores the importance of clear communication between insurers and policyholders concerning any changes in vehicle usage, minimising potential disputes over claims.

Published:Wednesday, 4th Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

AFCA Upholds Insurance Fraud Ruling Over Disputed Possum Accident 26 Jun 2025: Paige Estritori A motorist's claim that he crashed into a tree to avoid a possum has been denied by the Australian Financial Complaints Authority (AFCA), which supported the insurer's fraud decision. The incident involved the driver crashing his Jeep—insured for over $20,000—on a dimly-lit street, purportedly avoiding the rain-soaked motorway en route to the store. - read more

Code Watchdog Criticises Insurer for Misleading Rejection Letters 24 Jun 2025: Paige Estritori The Life Code Compliance Committee has recently reprimanded a life insurance provider for issuing misleading rejection letters to policy applicants. These letters were deemed 'ambiguous and contradictory' and failed to clearly inform applicants of their review options after being denied coverage. - read more

Insurer Ordered to Pay Full Claim for Confusing Patio Coverage 23 Jun 2025: Paige Estritori A recent ruling mandates that an insurer must fully honor a storm-related claim due to ambiguous policy wording regarding items in open areas. The Australian Financial Complaints Authority (AFCA) determined that the insurer's restriction on coverage for items in a patio area was unfounded, as the policy's phrasing was not clear. - read more

Australia Sees Dramatic Drop in Catastrophe Losses 23 Jun 2025: Paige Estritori Last year saw Australia's insured catastrophe losses plummet to just $500 million, marking the lowest level since 2004, according to Aon's latest Climate and Catastrophe Insight report. Notably, the Insurance Council of Australia reported no disasters for the year, a situation not seen since 1982. This comes in stark contrast to 2023, when disaster-related insured losses soared to over $3.6 billion. - read more

Half a Million Australian Homes at Risk of Becoming Uninsurable, Climate Agency Reports 21 Jun 2025: Paige Estritori The Climate Change Authority has released a concerning report highlighting that, without immediate intervention, extreme natural hazards could cost Australians approximately $8.7 billion annually by 2050. The report urges the federal government to spearhead a comprehensive and well-coordinated national adaptation agenda to mitigate these risks. - read more