Insurance application form changed leaving customer underinsured


The story

Hamish was about to start work as a courier driver for A2B couriers.  Hamish completed a motor vehicle insurance application form at the A2B depot selecting all the ‘Optional Covers’ by ticking the appropriate boxes.  The depot manager, Frank, emailed the application to Best Brokers.  By the time the application reached Best Brokers the tick next to the box for the optional loss of use cover for Hamish’s van had been crossed out, and a tick placed in the corresponding ‘no’ box.  Best Brokers placed insurance for Hamish with the insurance company that did not include loss of use cover.  Best Brokers emailed a certificate of insurance to Frank and Frank says he gave the certificate of insurance to Hamish, keeping a copy on the A2B file.  The certificate of insurance stated loss of use was not included in the cover.


About a month later Hamish was involved in an accident caused by another car.  Hamish’s van was towed to a garage to be repaired.  Hamish hired a van to continue working while his van was repaired.  It took 8 days to repair the van but the van was not immediately returned because there was a dispute between Hamish and the insurance company about who should pay the excess.  As a result Hamish needed to hire a van for nearly two months costing $2,965.56.


Hamish asked the insurance company to recover the costs of the rental van from the insurer of the car that caused the accident.  The other insurer offered Hamish $65 a day for the 8 days it took to repair the van.  Hamish declined the offer and complained to FSCL about the insurance arranged by Best Brokers.



Hamish said he ticked the box on the application form requesting loss of use cover when he arranged insurance through Best Brokers.  Best Brokers did not arrange the loss of use cover as requested.  Hamish wanted Best Brokers to pay the rental vehicle costs of $2,965.56. 


Best Brokers did not agree to pay the rental vehicle costs because it arranged the cover Hamish asked for.  The box next to the loss of use cover on the application had the tick in the ‘yes’ box crossed out and a tick placed in the ‘no’ box before it reached Best Brokers.  Best Brokers assumed Hamish considered the cover, but decided against it and crossed the tick out. 


FSCL’s review

We were unable to determine who altered the application form, but noted Best Brokers sent a certificate of insurance to Frank at A2B couriers showing that loss of use cover was not included under the policy.  If Hamish had noticed the loss of use cover was missing he could have contacted Best Brokers to make sure he was correctly insured.


We could not see that anyone other than Hamish would have had a reason to change the application form before it reached Best Brokers.  In any event Best Brokers could not have altered the form, because it was emailed to Best Brokers with the alteration already made.


We also noted that even if Hamish had loss of use cover the most he could have received under the policy would have been $1,300.


We suggested that Hamish withdraw his complaint about Best Brokers, but if Hamish considered the insurance company was responsible for the confusion about payment of the excess, increasing his rental vehicle costs, he could complain to the Insurance and Savings Ombudsman.



Hamish did not agree with our preliminary view that he should withdraw his complaint.  Hamish said Frank did not give him the certificate of insurance and he had expected Best Brokers to have helped him more during the claims process.  We spoke again to Best Brokers.  Although Best Brokers did not accept any responsibility for the error it decided to offer Hamish a goodwill gesture of $500.  Hamish reluctantly accepted the offer.