AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute
AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An applicant's attempt to claim insurance coverage after the theft of an engine designated for his 1993 Nissan Skyline has been denied.
Despite holding a comprehensive motor policy with IAG, the insured's claim was rejected after multiple engines were stolen in a brazen ram-raid at his vehicle repairer's workshop in November 2023, prompting an appeal to the Australian Financial Complaints Authority (AFCA).
The crux of the AFCA's ruling rested on the lack of evidence indicating the claimant's ownership of the engine, thereby negating any financial loss acknowledged under the policy. According to an AFCA ombudsman, even if ownership was established, the engine's status-intended but not installed-did not align with the policy’s definitions of 'vehicle' or 'modifications.'
Furthermore, the complainant had not opted for an additional policy benefit that could extend the cover to spare parts awaiting assembly into the insured vehicle. As a result, the claim for engine theft remains outside the current policy's provisions.
The insured also sought assistance from IAG to recover costs from the repairer, a request AFCA deemed inappropriate, emphasizing that issues pertaining to the repairer fell outside the scope of his insurance contract. This path remains a private matter between the claimant and the repairer involved.
This case highlights the critical importance for policyholders to thoroughly understand the intricacies and limitations of their insurance policies, particularly regarding coverage for vehicle components not yet integrated into the car. It demonstrates the necessity for explicit policy terms and the potential need for additional cover options to protect significant investments like spare parts.
The decision may prompt individual insurers and the wider insurance market to reassess coverage options related to spare parts and modifications to align with consumer expectations and reduce disputes. Policyholders are advised to consult their insurers to ensure adequate coverage, especially when dealing with valuable customizations or restorations. This incident serves as a valuable reminder to scrutinize insurance policies closely and engage with insurers proactively to clarify available coverage options.
Published:Sunday, 4th May 2025 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
In a significant ruling, the Supreme Court of New South Wales has imposed fines totaling $16.8 million on Allianz Australia Insurance and its subsidiary, AWP Australia, for disseminating misleading information about their travel insurance products between 2016 and 2018. This decision underscores the critical importance of transparency and accuracy in the insurance sector. - read more
Recent research conducted by the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade (DFAT) has unveiled a concerning trend: approximately 14% of Australian travelers embark on international journeys without any form of travel insurance. This statistic has prompted industry leaders to urge Australians to reconsider the importance of securing adequate coverage before traveling abroad. - read more
In 2024, medical incidents emerged as the leading cause of travel insurance claims among Australian travelers, accounting for more than 40% of all claims handled by nib Travel. This trend underscores the critical importance of securing comprehensive travel insurance to mitigate the financial risks associated with medical emergencies abroad. - read more
Over the past five years, Australian homeowners have experienced a significant 51% increase in home insurance premiums. This surge has placed a considerable financial burden on property owners nationwide, with Darwin residents facing the highest costs. - read more
Recent developments in the global financial markets have sparked discussions about potential benefits for Australian insurance policyholders. A significant sell-off in the insurance sector on Wall Street has led analysts to speculate that Australian insurance premiums could see a reduction in the near future. - read more
As the effects of climate change become increasingly evident, Australian homeowners are facing a surge in home insurance premiums. The rising frequency and severity of natural disasters, such as floods, bushfires, and storms, have significantly impacted the insurance landscape, leading to higher costs for property owners. - read more
The Insurance Council of Australia (ICA) has recently released a white paper highlighting the urgent need for reforms to state and territory civil liability laws, which have remained largely unchanged for nearly 25 years. These outdated laws are contributing to significant increases in public liability insurance premiums, affecting a wide range of businesses across the nation. - read more
Liberty Specialty Markets has announced the addition of a company insolvency extension to its Australian directors' and officers' (D&O) liability policies. This innovative feature is designed to support companies and their directors by covering reasonable costs incurred when engaging approved advisers under the 'safe harbour' insolvency regime. - read more
The Australian Prudential Regulation Authority (APRA) has released data indicating a substantial underwriting profit of $1.55 billion in short-tail insurance lines for the September quarter. This marks a notable improvement in the sector's performance, with householders insurance contributing $636 million to the overall profit. - read more
In a recent ruling by the Australian Financial Complaints Authority (AFCA), a landlord's $99,295 theft claim was denied due to non-disclosure of a tenant's change in property use. The case underscores the critical importance of accurate tenant use disclosure in property insurance policies. - read more
Agroforestry is a transformative approach to land management that integrates trees into agricultural landscapes. In Australia, where farmers contend with variable climates and environmental challenges, agroforestry offers a resilient pathway to productivity and sustainability. - read more
Crop insurance is a type of insurance policy designed to protect farmers from the financial losses that arise from damages to their crops. This could be due to various risks, including adverse weather conditions, pests, and diseases. - read more
Australian farmers face an array of natural disasters that can threaten livelihoods and disrupt the delicate balance of agricultural ecosystems. From devastating bushfires and droughts to powerful storms and floods, these catastrophic events pose serious risks to the farming community. Understanding and preparing for these forces is not just about survival; it's about building a sustainable future for farms across the continent. - read more
Farming in Australia is more than just a way of life; it is a critical sector that supports the nation’s economy and food supply. However, managing a farm comes with its own set of unique risks. From natural disasters to equipment failures, farmers face numerous challenges that can impact their livelihood. - read more
For Australian farmers, livestock is more than just a vital asset; it's the heartbeat of their livelihood. In a land where the sunburnt plains are as relentless as they are beautiful, protecting your herd isn't just a duty; it's a necessity. That's where livestock insurance comes into play—a shield against the unpredictability of Mother Nature. - read more
Australian farmers face a unique set of challenges due to the vast and varied climate conditions that sweep across the continent. From the scorching heat and prolonged droughts of the Outback to the tropical storms and torrential rains of the northern regions, weather-related risks are an integral part of agricultural life in Australia. - read more
As the backbone of Australian agriculture, farm equipment plays an essential role in day-to-day operations across our expansive and diverse landscapes. From the vast wheat belts to the tropical fruit farms, machinery ensures efficiency and productivity in the face of constant challenges. But with reliance on such equipment comes significant risk—the financial burden of damage or loss can be devastating to a farmer's livelihood. - read more
Farm liability insurance is a type of coverage that protects farmers from financial losses due to legal claims and lawsuits. This insurance is crucial for safeguarding your farm against various liabilities that may arise from farm operations. - read more
Farming is a vital industry in Australia, requiring significant investment in equipment, crops, livestock, and labour. As with any major investment, protecting it is crucial. That's where farm insurance comes in. - read more
In the dynamic world of Australian agriculture, farm equipment plays a crucial role in the day-to-day operations of farms. From tractors to harvesters, having the right machinery means managing your farm more efficiently. However, the high value of this equipment makes it essential to protect it adequately through insurance. - read more
Need a Quote?
Start your free farm insurance quote comparison here.
Knowledgebase
Replacement Cost: The amount it would cost to replace or rebuild an insured asset with one of similar kind and quality, without depreciation.