Charred vehicle claim must be paid, despite insurer suspicions

A complainant whose car was found burnt out has won his claims dispute after an Australian Financial Complaints Authority (AFCA) determination overruled his insurer’s assessment which questioned the legitimacy of the event.

The vehicle owner lodged a claim after his 2010 Subaru Forester was stolen and found destroyed by the police in a neighbouring suburb on May 7 last year.

The man said he left the car at a friend’s house after drinking above the legal alcohol limit and had held possession of the vehicle’s two keys.

Auto & General said the claim lacked critical information, noting a lack of CCTV footage and further police inquiry into the event. It elected to deny the claim and questioned the claimant’s motivations.

The insurer highlighted inconsistencies in the complainant’s version of events about his movement on the night of the event, noting telephone records that showed him to be in a different location.

The claimant said that he and a friend had accidentally swapped phones that evening and that he had made calls from his iPad, which shared the same mobile number as his phone, that night from his home. The insurer did not dispute the complainant’s explanation of the events.

Auto & General also relied on a report from a forensic locksmith, referred to as FL, that said the car’s ignition lock had not been forced from the steering column.

FL said the evidence, which they admitted had been hampered by the vehicle’s burnt-out state, “clearly showed” that the vehicle could only be started with the “correctly coded key”.

The locksmith acknowledged that it was possible that the key could have been copied or cloned by a third party or that the car was towed to the location.

AFCA said the evidence provided by Auto & General failed to prove that the claim was not legitimate.

It said there was “limited information” regarding the claimant’s financial motive to submit a falsified claim, noting that he had a stable income, no criminal history and that the vehicle had been in good mechanical condition.

AFCA acknowledged that the telephone record “raises concerns” about the claimant’s movements on the night of the incident but said it was not enough to deny the claim.

“FL’s report shows the vehicle could have been taken by a third party who could have cut or programmed a correctly coded key,” AFCA said.

“There is no evidence of financial motive. The evidence does not show the vehicle was in a poor condition.”

It said the complainant showed that the damage to the vehicle had been “sudden, unforeseen, unexpected and unintended,” and required Auto & General to accept the claim.

“I do not accept the insurer has shown the complainant breached his duty of utmost good faith,” AFCA said.

“Therefore, the insurer is required to pay the complainant’s claim in accordance with the terms and conditions of the policy.”

The ruling also required Auto & General to reimburse the policyholder for tools and other personal items that had been in the vehicle at the time that it was stolen.

Click here for the ruling.