Car owner’s $105,000 payout after insurer’s fraud claim

An insurer has been ordered to pay out $105k over the theft of a 4WD covered for twice its purchase price, even though its owner left it with the windows down next to a second vehicle of his that was also stolen. Both vehicles were later found burnt out.

An insurer has been ordered to pay out $105,000 over the theft of a four-wheel-drive covered for twice its purchase price even though the owner left it overnight with the windows down behind a Sydney car wash – next to a second vehicle of his that was also stolen.

The order was made recently by the Australian Financial Complaints Authority (AFCA) in a case brought by the owner of the 2019 Toyota LandCruiser after his claim was rejected by Insurance Australia Group on suspicion of fraud.

In its determination, AFCA said the man, who was not named, had to establish on the balance of probabilities that the theft “and destruction of the vehicle by fire was an incident that he did not intend or expect to happen”.

The 4WD was stolen some time after police noticed the 4WD and another vehicle in a public carpark behind a car-wash at Werrington in Western Sydney at 11pm on September 11, 2021.

According to AFCA’s determination, the owner said he only realised the Toyota had been taken when he got a call from the car wash two days later. It is unclear why the vehicles were left behind the car wash.

The man then contacted police who found the 4WD and the second vehicle, which was also his, about 5km away.

Both were burnt out.

The case was brought by the owner of a 2019 Toyota LandCruiser.

The second vehicle appears to have been insured by another provider.

IAG refused to pay the claim on the 4WD, alleging it was a set-up.

In its determination, AFCA noted IAG said “the complainant would benefit significantly from the claim being paid. The complainant insured the vehicle for twice its purchase price. The complainant says he got a good deal and that the ­insurance value selected was because he was to do modifications to the vehicle, which he hadn’t done”. “What the insurer does not say is that the agreed value was within a range acceptable to it when the vehicle was insured,” AFCA wrote.

AFCA noted the IAG had questioned why the man did not disclose the theft of the other vehicle when it was stolen at the same time.

“However, the (insurer’s) investigator did not ask a question about this,” AFCA said.

AFCA also noted the owner saying he had “no knowledge of how the vehicle was stolen when forensic information suggests it was with a correctly coded key and … (he) … retained the two keys” plus he “could not answer questions about why windows were left down”.

Still, it added, “there is no evidence that physically links the complainant to the loss of and damage to his vehicle”.

“Whilst the police officer who attended advised of his unsupported suspicion, he confirmed that there is no CCTV footage and no other evidence that links the complainant to the loss event,” AFCA said. “The complainant has ­established a valid claim under the terms and conditions of the policy.”

The ruling is binding on the insurer.