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

Significant Increase in Health Insurance Premiums Anticipated for 2026 21 Jan 2026: Paige Estritori Health insurance premiums are set to experience a substantial increase in 2026, with projections indicating a global rise of 10.3%. This marks the third consecutive year of significant hikes, following increases of 10% in 2025 and 9.5% in 2024. These figures are highlighted in WTW's 2026 Global Medical Trends report, underscoring the persistent inflationary pressures affecting insurers and employer-sponsored health plans worldwide. - read more

Private Health Insurers Under Scrutiny for Profits Amid Rising Premiums 21 Jan 2026: Paige Estritori Recent analyses have brought to light significant concerns regarding the profit margins of private health insurers in Australia, especially in the context of rising premiums. The Australia Institute has highlighted that major insurers are reporting substantial profits while simultaneously increasing premiums, a situation that has sparked criticism and calls for greater transparency within the industry. - read more

Health Minister Puts Private Health Insurers on Notice Over Pricing Practices 21 Jan 2026: Paige Estritori Health Minister Mark Butler has issued a stern warning to private health insurers in Australia, cautioning them against employing underhanded tactics to increase premiums. This comes in response to findings from the Commonwealth Ombudsman, which revealed that some insurers have been closing old policies and introducing more expensive new ones, effectively circumventing regulatory limits on premium hikes. - read more

AUSactive Unveils Comprehensive Insurance Solution for Fitness Professionals 21 Jan 2026: Paige Estritori AUSactive, Australia's leading body for the exercise and active health sector, has announced the launch of a new insurance product tailored specifically for fitness professionals. This initiative, developed in collaboration with global insurance broker Marsh, aims to provide enhanced protection while offering lower premiums compared to existing market options. - read more