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ARTICLE · 02 SEPTEMBER 2014

How underwriting guidelines saved an Australian insurer $250,000

Cooper Grace Ward
Cooper Grace Ward
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This recent case reinforces that clear and consistent underwriting guidelines are essential for all insurance agencies.

AustraliaInsurance
Tony Park
Tony Park
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The recent Queensland Court of Appeal decision of Michail v Australian Alliance Insurance Company Ltd [2014] QCA 138 reinforces that clear and consistent underwriting guidelines are essential for all insurance agencies.

In this case, Mr Michail had insured his Aston Martin for $250,000 with Australian Alliance Insurance Company Ltd's (AAI) agent, Shannons. The vehicle was subsequently damaged and deemed a 'total loss' under the insurance policy.

When taking out the policy, Mr Michail failed to disclose relevant aspects of his traffic history. Shannons, relying on the underwriting guidelines, claimed that, if they had been made aware of Mr Michail's undisclosed traffic history, they would not have entered into the policy.

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