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.
In a recent ruling, the Australian Financial Complaints Authority (AFCA) sided with a motor insurance policyholder, awarding her the full value of her stolen vehicle alongside $3000 for non-financial losses, dismissing the insurer's fraud accusations.
The ordeal began when the woman's 2013 Holden mysteriously disappeared from her street in November 2023. Despite promptly informing the police, the car was not recovered. The insurer, IAG, viewed the situation with skepticism due to the claimant's financial situation and contested the validity of the claim.
IAG's skepticism was based on an external investigation, which highlighted that the policyholder was unemployed, received Centrelink support, and had a limited bank balance. These financial conditions appeared to IAG as motives for a dishonest claim, particularly with the vehicle's insurance valued at $30,800-deemed excessive by the insurer.
Additionally, the investigator noted the police's possibility that the car might have simply been misplaced instead of stolen, and pointed out discrepancies in the claimant's account regarding the car keys and her partner's observations of the theft incident.
IAG found further support from a forensic locksmith's opinion. The expert argued that the Holden's dual factory immobilisation made it an unlikely target for auto theft.
Countering the accusations, the car owner maintained her innocence, highlighting her full cooperation with both the insurer and the police. She attributed any errors in her statements to confusion and stress, exacerbated by personal difficulties, including domestic violence.
The claimant also clarified that any prior damage to the vehicle was minor and that she had been planning repairs. Stress and relationship issues had delayed these plans. She explained that her speculation on the vehicle's possible whereabouts stemmed from the local reputation for abandoned cars.
After examining the details, AFCA determined that IAG's fraud assertions lacked substantial proof, emphasizing no clear evidence from both the police and the locksmith that implicated the claimant in the theft.
AFCA's ombudsman acknowledged minor discrepancies in the testimonies from the claimant and her partner but dismissed them as common and insufficient to substantiate a fraud claim.
The ruling ordered IAG to process the insurance claim and address $3000 in compensation for the stress induced by their claims management approach. AFCA stated, “The insurer’s accusations of dishonesty were serious yet unsupported, leading to unwarranted distress for the complainant.”
The case highlights the need for thorough evidence before allegations of fraud are asserted. Engaging with policyholders in good faith remains pivotal to fair claims handling. This incident, originally reported by Insurance News, underscores the importance of compassionate and evidence-based claim assessments.
Published:Monday, 17th Feb 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Australian Food Super has announced a transition to age-based pricing for its insurance offerings, a move that will see premium costs vary according to members' age brackets. Effective November 1, 2025, this change aims to align insurance costs more closely with the risk profiles associated with different age groups. - read more
Recent research from Rainmaker Information indicates a significant decrease in life and income protection insurance premiums across Australia. Direct life premiums have fallen by 7% since 2024, while direct income protection premiums have seen reductions of 12% and 13% for policies with 30-day and 90-day waiting periods, respectively. - read more
The global insurtech sector experienced a notable downturn in funding during the fourth quarter of 2024, with total investments halving to $US688.24 million compared to the previous quarter. This decline marks the lowest annual funding level since 2018, according to data from Gallagher Re. - read more
The Australian general insurance industry is on a trajectory for substantial growth, with direct written premiums (DWP) projected to exceed $144 billion by 2029. This forecast, provided by data and analytics firm GlobalData, reflects a compound annual growth rate (CAGR) driven by increasing demand for coverage in response to the rising frequency of natural disasters. - read more
Welcome to the complex world of running a small business in Australia where navigating through liability risks is as crucial as managing daily operations. This article is crafted to illuminate why every Australian small business needs liability coverage — a shield to protect against potential financial catastrophes. - read more
In the bustling world of small businesses, the phrase 'expect the unexpected' captures the essence of entrepreneurship. While you can plan for success, unforeseen risks are always lurking around the corner. That's where the importance of insurance comes into play. It acts as a safeguard, protecting the lifeblood of your business against potential perils. - read more
Public liability insurance is an essential part of any business's risk management strategy, especially for those operating in Australia. It's designed to protect businesses when they're found legally responsible for injury or damage to third parties due to their operations. But what happens when you need to make a claim? That's where understanding the claims process becomes vital. - read more
Welcome to our comprehensive guide on liability risks for small businesses in Australia. The world of business is fraught with challenges, and one often overlooked aspect is the array of potential liabilities that can stifle growth or even lead to catastrophic financial loss. It's crucial for small business owners to grasp the critical role that insurance plays in the protection and longevity of their ventures. - read more
Start Here !
Knowledgebase
Depreciation: The reduction in the value of an asset over time, used in insurance to calculate the actual cash value of property.
