Insurer Rejects Claim Over Diesel Fluid Mix-Up

1

The policyholder argued that according to the product disclosure statement (PDS), only "incorrect fuel usage" was excluded, and as AdBlue is technically not a fuel, her claim should be valid. Additional grievances arose after alleging the insurer’s tow service inflicted further damage to her car, necessitating a new steering rack and wheel realignment.

Suncorp acknowledged the issue with its initial claim rejection, where the decision was based solely on the original PDS. However, the insurer pointed to a supplementary product disclosure statement (SPDS), which explicitly excludes coverage for damage resulting from using fluids not recommended by the vehicle's manufacturer. This key differentiation was reportedly communicated to the policyholder during her policy renewal.

The Australian Financial Complaints Authority (AFCA) sided with Suncorp, determining that the insurer did not mislead the customer about her claim status. While Suncorp admitted to referencing outdated PDS wording initially, AFCA deemed their reliance on the updated SPDS appropriate and found no obligation for the insurer to cover the incident. Additionally, AFCA found limited evidence to support the policyholder's accusations regarding damage caused by the towing service, reinforcing Suncorp's account of a winched, non-dragged vehicle recovery.

Despite these rulings, AFCA ordered Suncorp to compensate the policyholder $3000 for delay-induced inconveniences during the claim process, which left her without her vehicle for an extended period, citing the resulting undue stress and hassle.

This case highlights the importance of clear communication and understanding of policy amendments, emphasizing the role supplemental documents play during insurance assessments. Consumers are reminded to review documentation thoroughly during renewals to grasp the full scope of their insurance protections and exclusions.

Published:Wednesday, 16th Apr 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

Rising Life Insurance Coverage Highlights Persistent Knowledge Gap 23 May 2025: Paige Estritori New findings from NobleOak reveal an upward trend in life insurance coverage among Australians, alongside a persistent gap in understanding of fully underwritten policies. According to the NobleOak Life Insurance Pulse Report, 60% of Australians aged 30 to 60 now hold life insurance, a noticeable increase from 55% the previous year. - read more

Ombudsman's Decision Favors Claimants in Solar System Dispute 23 May 2025: Paige Estritori Homeowners grappling with damaged solar power systems are set to have a substantial portion of their repair costs reimbursed. This follows a significant ruling where an ombudsman overruled the insurer IAG's application of an electronic malfunction exclusion in the claim process. - read more

AFCA Upholds Pause on QBE Claim but Dismisses Fraud Allegation 21 May 2025: Paige Estritori The Australian Financial Complaints Authority (AFCA) has ruled on a dispute involving insurer QBE and a vehicle damage claim. While QBE has been permitted to halt the processing of the claim until the policyholder, a company director, provides additional information, the fraud allegations levied against the claimant remain unsubstantiated. - read more