Insurers Ordered to Compensate Despite Theft Claim Doubts

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

Australian Insurers Adapt Investment Strategies in Response to Geopolitical Shifts

07 Mar 2026: Paige Estritori

Australian insurers are actively revising their investment portfolios in response to evolving geopolitical events and economic conditions. According to the 2025 Australian Insurance Report by Janus Henderson Investors, 47% of insurers plan to increase their investment portfolio risk over the next 12 months, with a significant focus on private markets. - read more

Rising Insurance Premiums: What Australian Beauticians Need to Know

07 Mar 2026: Paige Estritori

Recent industry reports indicate that Australian insurers are facing significant challenges due to escalating claims costs and broader economic pressures. This trend is leading to adjustments in premium rates, which could have direct implications for beauty salon owners and professionals. - read more

How AI is Transforming Investment Strategies in Australia's Insurance Sector

07 Mar 2026: Paige Estritori

The Australian insurance industry is increasingly turning to artificial intelligence (AI) to refine investment strategies and enhance portfolio performance. A recent report by Janus Henderson Investors reveals that nearly half of Australian insurers plan to increase their investment portfolio risk over the next year, with AI playing a pivotal role in this shift. - read more

What Beauticians Can Expect from the Upcoming Insurance News Outlook 2026 Conference

07 Mar 2026: Paige Estritori

The Insurance News Outlook 2026 conference, scheduled for March 19 in Sydney, is set to delve into the evolving landscape of claims trends and the accelerating influence of technology within the insurance industry. This event presents a valuable opportunity for beauty salon owners and professionals to gain insights into developments that could impact their insurance coverage and claims processes. - read more

IAG CEO Predicts Ongoing Insurance Premium Rises

07 Mar 2026: Paige Estritori

Insurance Australia Group (IAG), a leading insurer in Australia, has reported a significant 91% increase in net profit for the first half of the 2024-2025 financial year, reaching $778 million. This substantial profit growth is largely attributed to favourable weather conditions during the period. - read more

Click for more Insurance News