Insured challenges premium rise that followed 'at fault' pothole claim

A complainant whose comprehensive car insurance policy premium rose significantly on renewal, partly due to an “at fault” claim after he hit a pothole, has lost his bid to have the increase reversed by the Australian Financial Complaints Authority (AFCA).

The policyholder received renewal documents on June 22 last year informing him his premiums would go up to $1,152.09 annually, from the previous year’s cost of $752.45.

The man said Suncorp provided a “generic statement” about the cost of business and commercially sensitive information as the cause of the increase. He also said the insurer incorrectly recorded one of his claims as “at-fault”.

Suncorp said it correctly recorded the claim as “at-fault” and said the premium increase accurately reflected the cost of doing business and the removal of the claims free discount.

The disputed claim regarded damage to the complainant’s vehicle after he hit a pothole. The man said the local council was liable for the damage because it had known about the pothole and was negligent for not repairing it.

He said the council had conducted repeated repairs on the road that showed it was aware of the risk of dangerous potholes.

Suncorp contacted the council, who denied liability, saying they were “entitled to immunity under the Civil Liability Act 2002 for defects in the road”.

The insurer said the complainant failed to show that the damage occurred because of the council’s negligence and that it determined the claim as “at-fault” because the claimant had been in full control of the vehicle.

AFCA sided with Suncorp, saying it was not satisfied by the complainant’s contention that the council had been aware of the defects on the road.

“The presence of previous repairs does not show the council had actual knowledge of the pothole the complainant hit,” AFCA said.

The ruling said the insurer had the “general discretion” to “fairly and reasonably” determine how it recorded the claim.

It said that Suncorp’s decision was fair because the complainant failed to show that the council was negligent and that he contributed to the damage because he breached his duty of care to avoid hazards on the road.

The insurer provided AFCA with calculations on how it came to the increased premium number, saying that without the claim, the price would have been $964.86.

It said the claim contributed to the base premium and removed the “Claims Free Rewards” discount that had been in place, which resulted in the listed amount on the policy renewal.

AFCA said there was no information to show that the premium had been incorrectly or unfairly determined, although it acknowledged its limited jurisdiction in considering premium costs disputes.

It said if the complainant continued to be dissatisfied with the cost, he had the option of changing insurers to find a more suitable premium.

Click here for the full ruling.