Insurers Ordered to Compensate Despite Theft Claim Doubts

10

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

Share this news item:

Insurance News

Rising Liability Costs Put Pressure on Australia's Leisure Sector 20 Nov 2025: Paige Estritori The Australian Amusement Leisure & Recreation Association (AALARA) has raised concerns over the escalating costs of public liability insurance, which are placing significant pressure on amusement and recreation operators across the country. This warning follows the Insurance Council of Australia's (ICA) recent call for reforms to civil liability laws. - read more

New Report Highlights Insurance Challenges for Australian Small Businesses 20 Nov 2025: Paige Estritori A recent report by the Australian Chamber of Commerce and Industry (ACCI) has revealed that small businesses in Australia are paying up to 30% more for their insurance premiums due to taxes and levies imposed by state and territory governments. This financial burden is leading to a worrying trend where an increasing number of small businesses are either underinsuring or forgoing insurance altogether. - read more

Introducing 'eeger': A New Era for Hospitality Careers in Australia 20 Nov 2025: Paige Estritori The Australian hospitality industry has long been a cornerstone of the nation's economy, offering diverse experiences to both locals and tourists. However, recent challenges, including labour shortages and the need for skilled workers, have prompted the government to take proactive measures. In response, the Australian government, in partnership with Accommodation Australia, has unveiled 'eeger', a comprehensive platform designed to attract, train, and retain talent within the tourism, hospitality, and travel sectors. - read more

Harnessing Technology: A Catalyst for Growth in Australia's Hospitality Industry 20 Nov 2025: Paige Estritori In the face of rising operational costs and labour shortages, the Australian hospitality industry is increasingly turning to technology to drive growth and enhance customer experiences. A recent report by Lightspeed highlights that nearly half (47%) of venue operators acknowledge the pivotal role of digital tools in improving operational efficiency. Additionally, 41% noted enhancements in customer service, attributing these improvements to the integration of technology that allows staff to focus more on service delivery. - read more