Full Federal Court finds Auto & General did not include an unfair contract term in its insurance contracts

The Full Federal Court has dismissed ASIC’s appeal against an earlier Federal Court ruling that a term in house and contents insurance policies issued by Auto & General Insurance Company Limited (Auto & General) was not unfair. The term required policy holders to notify Auto & General if ‘anything’ changed in their home and contents.

ASIC alleged in the proceeding that the term was unfair as ASIC considered it: 

• imposes an unclear obligation on policyholders regarding what they need to disclose to Auto & General;
• suggests that Auto & General has a broader right to refuse claims or reduce the amount payable under claims if the policyholder does not meet the notification obligation than is available under the Insurance Contracts Act; and 
• could mislead or confuse the policyholder as to their true obligations and rights under the contract.  

ASIC is considering this decision.