A recent decision in the High Court has reinforced that in certain circumstances insurers are not permitted to use terms of the insurance contracts to refuse cover of an insurance claim. The issue was that the claimant’s failure to comply with a policy term had nothing to do with the losses flowing from the accidents.
The case involved the owner of a company that operated a fleet of trucks that hauled cargo on the east-west run between Western Australia and the Eastern States. The owner bought a policy to insure his trucks on that run. The run was known to be a high-risk run. The insurance policy included a clause requiring that the truck driver must have undergone psychological testing, known as the “PAQS” test, and attained a minimum score of 36.
Sometime after the policy was established two of the owner’s trucks were damaged in separate accidents on the east-west run. The insurance company refused the owner’s claims on the policy. The insurance company argued that neither driver of the damaged trucks had undergone the required “PAQS” testing.
The High Court rejected the insurance company’s argument. The court decided that the accidents would have occurred even if the drivers had undertaken the test and passed.
If your insurer is refusing your claim, or otherwise seems to be acting unreasonably in relation to a claim, then you may wish to consult us.