Welfare recipient beats fraud allegations, wins $250k insurance payout on BMW

A welfare recipient has won his collision claim against major insurer IAG, even when he faced fraud allegations. Here’s how he pulled it off.

A welfare recipient has overcome accusations of fraud to win a $250,000 insurance payout on a BMW he bought for $65,000.

Insurance giant IAG had rejected the man’s claim, arguing – among many other things – that his collision scenario was “implausible”.

So the man filed a case with the Australian Financial Complaints Authority (AFCA) and won, refuting every allegation made against him.

The insurer said the man, who was not identified, had “motive” to make a false claim because he stood to pocket a “substantial financial gain” and had no stable income apart from Centrelink benefits.

The man responded that he traded on the stock market and with cryptocurrencies, earning up to $40,000 a month.

The man won a $250k payout on a BMW he paid $65k for. Picture: AFP

And AFCA’s adjudicator noted that phone recordings revealed the man hadn’t known how much to insure the car for, with the insurer telling him the average value for his vehicle was between $175,000 and $325,000.

“The complaint initially (insured) the vehicle for $280,000, before lowering the amount to $250,000. I am satisfied that this does not assist the insurer’s position,” the adjudicator said.

He had bought the BMW for $65,000 just days before.

Undeterred, the insurer said the man also had “opportunity”.

The collision in which the BMW had been written off occurred seven months later, after the man and his partner had left it parked on a street and caught an Uber to a restaurant.

Why hadn’t the couple taken the car home to save themselves a walk the next day, the insurer asked, or put it in a secure car park while they had dinner?

The man responded that he and his partner had decided they would have a drink with their meal and the area was known as being popular for random breath testing.

He also said they did not want to waste time driving home and the street had no parking restrictions.

The adjudicator accepted these explanations.

So the insurer argued that the man had not been frank.

The collision in which the BMW had been written off occurred seven months later, after the man and his partner had left it parked on a street and caught an Uber to a restaurant.

He had failed to mention he was disqualified from driving, or that he had a previous claim, and he didn’t call the police after discovering his car was damaged.

The adjudicator was not persuaded.

Then the insurer turned to raising concerns about the nature of the damage to the BMW, suggesting it was “malicious”.

A report from its crash investigator said the culprit was likely a reversing truck doing a three-point turn on an unsuitable stretch of road.

But the AFCA adjudicator didn’t buy that either.

“The report does not provide any specific information as to why the roadway is not conducive to a three-point turn being conducted,” the adjudicator said.

Later, the crash investigator conceded there was no way to know the length of the vehicle that hit the BMW.

The unnamed adjudicator then ruled in the complainant’s favour.

“I accept there are inconsistencies, but I am not persuaded these alone, even when considered together, satisfy the burden of proof to establish the complainant has acted fraudulently or failed to be truthful and frank, to the degree where it would allow the insurer to decline the claim,” the adjudicator said.

An IAG spokesman said: “Claims may require investigation to determine the right outcome under the policy, and given the cost of claims impacts everyone’s insurance premiums, it’s important that alleged fraudulent claims are investigated.

“As soon as AFCA provided its determination … we immediately arranged the financial settlement for our customer,” the spokesman said.

The man received $250,000 plus interest.

Originally published as Welfare recipient beats fraud allegations, wins $250k insurance payout on BMW