Customer Wins in Insurance Dispute Over Laser Equipment
Customer Wins in Insurance Dispute Over Laser Equipment
The crux of the dispute arose when the salon's laser machine broke down in February, and repair costs were estimated at $18,069. The salon owner had insured the machine for $50,000 in December of the previous year, following its second-hand purchase and refurbishment in 2012 for $66,000.
Despite acknowledging the damage, QBE Insurance reduced its compensation to $7,286, citing an underinsurance clause. QBE claimed that due to the model being discontinued, a replacement would necessitate insuring at $155,000.
The insurer's clause stipulated that if the sum insured was less than 80% of the "total new replacement value," the liability could be adjusted accordingly. However, the salon owner challenged this assessment, arguing that a comparable refurbished machine was valued between $30,000 and $45,000.
The Australian Financial Complaints Authority (AFCA) intervened, siding with the salon owner. AFCA declared that policy wording began ambiguous, noting discrepancies in terms such as "full value" and "total new replacement value", creating confusion about the clause's intent.
AFCA clarified: "When the policy is read as a whole, it indicates the laser should be insured for its full value, or what it would cost to replace with a similar laser in a similar condition." They refuted QBE's expectation that the salon owner should have insured the laser for $155,000, indicating she would never recoup more than $50,000 under policy terms.
This ruling mandates QBE to cover the repair costs, less the policy’s deductible. The case emphasizes the importance of clarity in insurance contracts and equitable treatment of claims.
Published:Wednesday, 27th Nov 2024
Source: Paige Estritori
Share this news item:
| Australian Life Insurers Achieve Significant Underwriting Gains in Q4 2025 23 Mar 2026: Paige Estritori The Australian life insurance sector has reported a substantial underwriting gain of $279 million for the December quarter of 2025, a significant improvement from the $36 million recorded in the same period the previous year. This data, released by the Australian Prudential Regulation Authority (APRA), highlights a notable turnaround in the industry's financial performance. - read more |
| Record Profits for Australian General Insurers in 2024 23 Mar 2026: Paige Estritori Australia's general insurance industry has reported an unprecedented after-tax profit of $6.1 billion for the year 2024, marking a significant milestone in the sector's financial performance. This figure is three times higher than the five-year average of $2 billion, according to KPMG's General Insurance Insights report. - read more |
| IAG Achieves 33% Increase in Insurance Profit Amid Lower Claims 23 Mar 2026: Paige Estritori Insurance Australia Group (IAG), the country's largest insurer, has reported a 33% increase in its full-year insurance profit, reaching A$606 million for the 12 months ending June 2025. This significant growth is attributed to a combination of reduced claims expenses and strategic premium adjustments. - read more |
| Adore Beauty's Nationwide Expansion: Nine New Stores Opened 23 Mar 2026: Paige Estritori Adore Beauty, a prominent name in Australia's online beauty retail sector, has significantly expanded its physical presence by opening nine new stores across the country. This strategic move marks a substantial shift from its digital-only model, aiming to provide customers with a more immersive shopping experience. - read more |
| The Digital Age of Insurance: Keeping Costs Down with Online Quotes The horizon of the insurance industry has undergone a transformative shift with the advent of digital technology. With a few clicks, consumers can navigate the once-complex world of insurance policies from the comfort of their home. The digital landscape for insurance services offers unprecedented access to information, comparisons, and instant communication, fostering a more empowered insurance client. - read more
|
| How to Choose the Right Income Protection Insurance as a Freelancer Income protection insurance is a type of coverage designed to replace a portion of your income if you're unable to work due to illness or injury. It's an incredibly vital form of insurance for freelancers, who may not have the same safety nets as traditional employees, such as paid sick leave or disability benefits. - read more
|
| Income Insurance: The Safety Net for Your Financial Goals in Australia Financial security is pivotal for anyone striving to meet their life goals, be it owning a home, educating children, or ensuring a comfortable retirement. In Australia, where uncertainties can disrupt our best laid-out financial plans, having a safety net in place is essential. Income insurance offers just that—protection against the unforeseen events that could impact your income earning abilities. - read more
|
| How Pre-Existing Conditions Affect Your Income Protection Insurance Options Income protection insurance is a type of insurance policy designed to provide you with a continuous flow of income in case you are unable to work due to illness or injury. It's a safety net that helps ensure you can maintain your standard of living, even when unforeseen health issues arise. - read more
|
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of potential financial loss.