Rideshare, Non-Disclosure and the Broker's File Note
Mere insures her 2016 Toyota Aqua under a private motor policy for 'private and commuting use'. Her son Hemi, 22, is a listed driver. Hemi signs up to a rideshare platform and drives the Aqua on Friday and Saturday nights carrying paying passengers. Mere phones her broker and says Hemi 'does a bit of driving for an app company'. The broker's file note says 'occasional app driving - probably delivery' and the policy renews unchanged. Six weeks later Hemi has an accident while carrying a paying passenger. The repair cost is $14,000 and a passenger has a possible injury claim. The insurer declines the claim, relying on a 'private use' exclusion and non-disclosure of the rideshare use. Mere says she told the broker. The broker says Mere did not say 'rideshare'. The policy schedule lists 'business use: not covered'. Hemi's app records show 28 trips in six weeks.
1. Was the vehicle covered at the time of the accident? Explain the policy interpretation.
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The policy covers private and commuting use. Carrying paying passengers through a rideshare platform is a business or hire-and-reward use, not private use. The schedule expressly states business use is not covered. The app records showing 28 trips in six weeks rebut any argument that this was a one-off favour. The accident happened while Hemi was carrying a paying passenger, so the use falls outside the described use and the private-use exclusion applies. Even if Mere had disclosed the activity, the insurer would have needed to endorse the policy or issue a different product; disclosure alone does not create cover. The insurer is therefore entitled to decline the motor damage and the passenger's liability claim under this policy, subject to the exact wording and any statutory override.
2. What is the broker's position and what should happen next?
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The broker's file note is weak. Mere's statement that Hemi 'does a bit of driving for an app company' should have prompted specific questions: which platform, carrying passengers or goods, paid or unpaid, how often, and whether the app records trips. The broker assumed delivery and did not clarify. That may breach the advice/service standard and the FAP's processes. The broker should notify the insurer and the FAP's compliance officer, preserve the file, and not alter the note. Mere should be told the policy response and given the internal complaint and dispute resolution options. If the broker's failure caused Mere to believe she had cover, the FAP may need to consider remediation. The client also had a responsibility to give accurate information, but the broker's failure to ask is significant because the disclosure was ambiguous.
3. What advice should be given to Mere about future cover?
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Mere needs a motor policy that expressly covers rideshare or business use, or Hemi must stop carrying paying passengers in the Aqua. She should disclose the prior accident, the declined claim and Hemi's app driving. A standard private policy will not do. She should compare cover for passenger liability, vehicle damage, excesses and whether the platform provides any cover. If Hemi continues without correct cover, he risks personal liability for injury and damage. The adviser should document the advice and the client's decision.