A Honda owner whose cover was cancelled because he listed the wrong car model has won a claim dispute because his misrepresentation did not breach the relevant duty.  

The man claimed for damage after a crash involving his Honda Fit Hybrid, but during repairs insurer Auto & General discovered the model mix-up: the car was listed as a Honda Jazz Hybrid on the policy.

The insurer said the misrepresentation entitled it to deny the claim, because it did not cover imported vehicles such as the Fit.

It cancelled the man’s policy and denied his claim for third-party damage. The Honda had already been repaired.  

The claimant gave conflicting responses as to whether he knew the car was a Honda Fit when he purchased the policy.

He suggested he became aware of the issue only when the insurer asked him to check with the seller, but he later said he selected Honda Jazz on the policy because there was no Honda Fit option.

He argued the difference between the models was not big enough to justify policy cancellation, citing internet sources stating they were “the exact same car, just sold under different names in different global markets”.

In its dispute ruling, the Australian Financial Complaints Authority accepts the claimant probably knew his car was imported and made a misrepresentation when he bought the policy.  

But AFCA says the relevant duty, as set out in the Insurance Contracts Act, is to take reasonable care not to make a misrepresentation.

"Misrepresentation alone is not enough", it says, finding that the insurer has not shown that the complainant failed to take reasonable care.

"Much of the complainant’s concern is about the fact he could not select Fit as an option when purchasing the policy," AFCA said.

"I consider, on balance, this likely supported the complainant’s belief that he was selecting the appropriate available model when purchasing the policy.

“There was no information available to the complainant during the online process to suggest if a particular model was not listed, the insurer would not insure it.

“I also do not consider the complainant could have reasonably inferred this solely on the basis that the option was not available."

The authority says Auto & General’s position was “unsupported by compelling reasoning or information” and the policy should be reinstated.

The decision also requires the insurer to accept the third-party damage claim.  

See the ruling here.