Claimant loses salvage dispute over wrecked $150,000 Porsche

A vintage car owner who sought to lower his vehicle’s salvage cost after it was deemed a total loss has lost his claims dispute.

The complainant held a comprehensive motor vehicle policy for his 1998 Porsche 911 Carrera Coupe with an insured sum of $150,000. He lodged a claim after he was involved in a “not at fault” accident on December 10, 2021, which insurer Suncorp accepted.

The claimant, who sought to keep the wrecked vehicle so he could rebuild it, challenged the insurer’s salvage estimate cost of $42,000, saying it was unfair and “significantly overpriced”.

The complainant said he was displeased with the offer because he had personally rebuilt the “unique performance” vehicle over two years and chose the specific policy with Suncorp because it specialised in the sector.

The insurer says it obtained the salvage estimate based on analysis from a vehicle auctioneer, referred to as MF, on how much the wreck would be sold for at an auction.

MF acknowledged that a standard Porsche 911 wreck would amount to somewhere between $25,000 and $30,000 but said that the additional modification pushed the insured vehicle price higher.

The complainant provided a salvage estimate from another auction house for $30,000, which he said was a fair sum. The auctioneer noted that the estimate was based on “sight unseen” and the amount could have changed upon an inspection.

The Australian Financial Complaints Authority (AFCA) noted that no precise sum had been determined by either party and referred to the policy’s Product Disclosure Statement (PDS) regarding the conditions for the insured vehicle’s salvage rights.

The PDS said that the insurer held the discretion to determine the salvage value that would be deducted from the settlement amount before returning the vehicle to the policyholder.

AFCA acknowledged that it was unclear if MF had viewed the vehicle but said that based on a series of emails between the auctioneer and the insurer, it could confirm that MF had reviewed the losses and given a fair estimate of the vehicle’s cost.

“Given the vehicle type, its good condition and bespoke construction, I accept the insured vehicle might fetch a higher-than-normal price from the right purchaser,” AFCA said.

“On balance, I accept the insurer’s process to review the salvage value of the vehicle was fair and in line with its policy.”

The complainant proposed a counteroffer of $37,000, which Suncorp rejected. AFCA said the insurer was not obliged to accept the proposal because it had only been an estimated amount which could have varied depending on the auction sale.

It said the complainant could elect to reject the insurer’s offer and bid for the vehicle at its auction if he believed he could obtain it for a lesser value.

The ruling awarded the insured a $500 compensation for non-financial losses relating to delays caused by Suncorp’s claims handling.

The insurer admitted that it “overlooked” the claimant’s email correspondence which led to no advancement of the claim for over three months.

Click here for the ruling.