Sam has decided to buy a motorcycle from Big Bikes, a dealership in Neutral Bay, NSW. He pays for a comprehensive insurance policy while in the dealership, insuring the motorcycle for $20,000, as he is worried it might be stolen. While answering the insurance questions from the finance & insurance staff member, he is asked about his driving history.

Although Sam had his licence cancelled for six months [four years ago] and has had 11 traffic tickets in the past five years, Sam believes these are not related to theft and that's all he wants the insurance for anyway, so his answers to the insurance questions are limited; he claims to have had just a couple of minor tickets, and no licence cancellations.

A few weeks later thieves break into Sam's garage and steal the motorcycle. As part of the claims process, his insurance company asks for a printout of his driving history from the RMS [RTA] and discovered Sam's driving history. They refuse to pay for his stolen motorcycle.

Required: Discuss Sam's situation, in relation to insurance law

subject: commercial law 2

answers in detail