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Car insurance comes crashing down

Raelene’s husband, Ray, received motor vehicle insurance through his work. In December 2014, Ray arranged motor vehicle insurance for two cars, his Hilux and Subaru (the Subaru) that Raelene drove. Raelene was the named driver of the Subaru.

Ray and Raelene later separated and in October 2015, Ray emailed his insurance company to stop the cover for the Subaru as Raelene had taken ownership of it following the separation. In November 2015 the insurance company removed the Subaru from Mr Ray’s work policy.

In January 2016 Raelene was involved in a serious car crash. The Subaru was written off and the other car involved in the accident was also damaged. Raelene contacted the insurance company to make a claim for the Subaru, but was advised the cover for this vehicle was cancelled in November.


Raelene comes to FCSL

Raelene complained to FSCL because she believed the insurance company should not have acted on Ray’s instructions to cancel the policy without consulting or notifying her. She said that the insurance company’s failure to advise her about the cancellation had caused her to be uninsured at the time of the accident.



Under our terms of reference, we can only consider complaints made by a person or on behalf of a person to whose benefit the financial service was provided.

With Ray’s consent, we reviewed his policy. Because Raelene was the named driver of the Subaru, she was receiving a financial service and therefore we had jurisdiction to investigate her complaint.


Our investigation

Despite Raelene receiving a benefit under the policy, the policy was not a joint policy. The policy was solely in Ray’s name under which Raelene had a benefit as a named driver.

However, as Ray was the sole named insured and the primary contact, we found that the insurance company was entitled to act on Ray’s instructions alone.

The insurance company was under no legal duty to notify Raelene of the changes to Ray’s policy.


Our insight

You may receive a benefit under someone else’s insurance however this does not make the policy a joint policy. Joint policies can also be cancelled or modified by just one of the joint insureds and the authority of both insured parties is not always needed.

It is advisable to advise your insurance company after a relationship ends if you need to change your cover or request information about your policy.