'Total loss': vehicle owner paid $54,000 after insurer fails to fix parking sensors

A complainant will be compensated for his damaged vehicle that was deemed “impractical to repair”, as well as non-financial losses relating to his insurer’s claims handling, following a dispute ruling determination.

The vehicle owner lodged an initial claim in December 2020 after he was involved in an accident, which Suncorp accepted. After the repairs were completed, the claimant said the vehicle’s parking sensors were not working properly.

The policyholder filed a complaint to the Australian Financial Complaints Authority (AFCA), which required Suncorp to repair the damaged sensor. The complainant said that the insurer failed to fix the sensor and that it continued to malfunction.

In a second determination in May last year, AFCA once again required the insurer to repair the damaged sensors, but it was not able to, and third complaint was lodged.

Suncorp did not dispute that the sensors were not functional and offered to deem the vehicle a total loss and pay the policyholder the agreed value of $54,000 as well as $500 compensation for the claims experience.

The complainant said he would agree to Suncorp’s offer if he could keep the vehicle for 12 months while looking for a replacement, or if the insurer could provide a temporary vehicle.

He also counter-offered for the insurer to pay him $6000 to repair the sensor issue, provide transport to the repairer and a temporary vehicle, and arrange additional compensation for the claims experience and stress.

AFCA said that the comprehensive motor policy stipulated that the insurer would keep vehicles that are deemed total losses, noting that it clearly stated that “your car salvage becomes our property”.

It acknowledged that the complainant was in a difficult position to find a replacement vehicle, due to the impact of covid on the car market, but said it would not be fair for the insurer to award him the agreed value as well as the car’s salvage.

The ruling allowed the insured 30 days to accept the settlement offer and advised him to find a replacement vehicle.

AFCA ruled that Suncorp should increase its non-financial losses compensation to $3000, noting its handling of the claim was the cause of an “unusual degree of stress, inconvenience and delay for the complainant.”

Suncorp had previously claimed that the sensors were working as they should, and the claimant said it had been “baseless and deceptive”.

“The complainant was clearly frustrated at not being believed about what he was saying about the vehicle’s sensors,” AFCA said.

Click here for the ruling.