I didn't disclose a previous accident when getting car insurance. Can they cancel my policy?

What the Law Says

Australian insurance law imposes strict obligations on applicants to disclose all material facts — including prior accidents — when applying for car insurance. Failure to do so can allow the insurer to cancel the policy, especially within certain time limits and conditions.

Under the Insurance Contracts Act 1984 (Cth), you have a legal duty to disclose every matter that a reasonable person in your circumstances would consider relevant to the insurer’s decision to accept the risk — including previous accidents, even if no claim was made. This is known as the duty of disclosure.

If you fail to disclose a previous accident, and that fact is 'material' (i.e., would influence the insurer’s decision on whether to insure you or on what terms), the insurer may have grounds to avoid (cancel) the contract — but only under strict conditions and time limits.

The insurer must act promptly: they generally cannot avoid the contract more than three months after becoming aware of the non-disclosure, and never after the policy has been on foot for more than six years.

Statutory Text

An insured shall, before the contract is entered into, disclose to the insurer every matter that is known to the insured and that a reasonable person in the circumstances would regard as being material to the decision of an insurer…

— Insurance Contracts Act 1984 (Cth), s. 21 — Duty of disclosure

Statutory Text

Where the insured fails to comply with section 21, the insurer may avoid the contract if the insurer would not have entered into the contract… or would have done so only on different terms.

— Insurance Contracts Act 1984 (Cth), s. 28 — Effect of breach of duty of disclosure

Statutory Text

The insurer may not avoid the contract… more than 3 months after the day on which the insurer first became aware of the failure to comply with section 21.

— Insurance Contracts Act 1984 (Cth), s. 28(2)(a)

What to Do

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