Insurers Ordered to Compensate Despite Theft Claim Doubts

10

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The policyholder filed a claim two days after her vehicle was reported stolen on March 23, 2022. She recounted purchasing the car from a friend, who is a certified motor mechanic, and leaving it at their house for servicing.

Insurance Manufacturers of Australia had raised numerous concerns about the circumstances surrounding the theft. These included a lack of proof of purchase and incomplete information about the vehicle's service history. The car was insured despite the new owner not driving it, which also raised suspicions. In addition, the friend did not cooperate with the insurer’s inquiries.

AFCA responded by stating that it is common for individuals to not have a purchase receipt when buying a vehicle privately. They accepted the bank statements showing a $35,000 transaction labeled "AA-Van" as adequate evidence of payment. They also acknowledged that service history details may have been in the vehicle at the time of theft.

The ruling emphasized that purchasing insurance was logical as it included coverage for non-driving events such as theft. While cooperation from the mechanic friend would have aided the investigation, it was not deemed a sufficient reason to reject the claim.

Concerns were also raised by the insurer about why the car remained with the friend for over nine months and inconsistencies in the car’s documented compliance and build dates. AFCA found no definitive reason for the extended storage but accepted explanations, such as Melbourne's lockdown and the complainant’s husband's health issues, as plausible.

The authority acknowledged a confusing situation regarding date inconsistencies but noted that the vehicle identification number (VIN) was consistent across documentation, thus confirming ownership and associated loss.

“Although it seems unlikely that a certified motor vehicle tester would make an error in the build date, it’s not an implausible mistake to make,” commented AFCA’s adjudicator.

Given all evidence, AFCA concluded that the complainant should be recognized as the owner who suffered a financial loss, and they instructed Insurance Manufacturers of Australia to accept the claim and process the payout.

For more details on the original case and ruling, refer to the Australian Financial Complaints Authority’s documentation.

Published:Monday, 29th Jul 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Surge in Mental Health Claims Reshapes Australia's Insurance Landscape

02 Dec 2025: Paige Estritori

Australia's insurance industry is experiencing a significant shift as mental health conditions have become the leading cause of total and permanent disability (TPD) claims. Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health issues now account for nearly one-third of all TPD claims, marking a substantial change in the industry's claim patterns. - read more

Australian Insurance Premiums See Notable Decrease

02 Dec 2025: Paige Estritori

Recent data indicates a notable decline in life and income protection insurance premiums across Australia, providing consumers with more affordable coverage options. According to the latest Direct Life Insurance Report from Rainmaker Information, direct life premiums have decreased by 7% since 2024. Similarly, direct income protection premiums have seen significant reductions, with average premiums for waiting periods of 30 days and 90 days decreasing by 12% and 13%, respectively. - read more

TAL's Health Sense Plus Now Covers Income Protection Policies

02 Dec 2025: Paige Estritori

In a significant development for policyholders, TAL has expanded its Health Sense Plus program to encompass income protection (IP) policies. This initiative, effective from August 8, 2025, aims to incentivise proactive health management by offering premium discounts to clients who engage in preventative health checks. - read more

Northern Australian Marinas Appeal for Government Support Amid Escalating Insurance Costs

02 Dec 2025: Paige Estritori

Marina operators across Northern Australia are sounding the alarm over surging insurance premiums, with some reporting increases exceeding 300% in recent years. This financial strain is prompting urgent calls for government intervention to ensure the sustainability of the industry. - read more

Coast Insurance Announces New Co-CEOs to Propel Strategic Growth

02 Dec 2025: Paige Estritori

In a significant move within the Australian insurance sector, Coast Insurance has appointed Stephanie Muller and Jordan Brindley as Co-Chief Executive Officers. This strategic decision underscores the company's commitment to robust leadership and sustained growth. - read more

Click for more Insurance News