AFCA Supports RAA Insurance in Vehicle Location Dispute

1

The son, who initially filed the claim following an accident in April of the previous year, saw his claim denied by RAA Insurance. The insurance provider, based in South Australia, concluded that the vehicle was a total loss but rejected the claim after discovering the car's purchase and registration in Victoria despite frequent visits to South Australia.

During the claims process, the son portrayed himself as the primary driver, asserting minimal use by his mother, the policyholder. However, he later altered his statements to AFCA, stating that the car was never his and was unregistered in Victoria. AFCA found these new assertions unconvincing due to the lack of documentation supporting his position.

The ombudsman involved in the dispute stated that evidence indicated the vehicle was mainly used, registered, and stored in Victoria at the time the policy was taken out. Consequently, it was determined that the policyholder misrepresented the car's usual location and storage when securing insurance coverage.

RAA Insurance referenced their underwriting standards, emphasizing that they do not extend coverage to vehicles registered outside South Australia or the Broken Hill postcode. A declaration from an RAA employee supported this position, confirming that the vehicle’s Victorian registration would have led to denial of coverage initiation.

AFCA observed that such misrepresentation compromised RAA's risk assessment capabilities, justifying the insurer's decision to decline the claim. The omission of accurate information about the vehicle's storage location led to the policy being issued under false pretenses. AFCA concluded that compelling the insurer to honor the claim would be unjust, given the circumstances.

Published:Thursday, 24th Apr 2025
Source: Paige Estritori

Share this news item:

Insurance News

Potential AI Errors: A Looming Challenge for Insurers 24 Apr 2025: Paige Estritori Industry experts are signaling a potential risk for underwriters due to claims arising from inaccuracies produced by artificial intelligence (AI), likening it to the 'silent cyber' phenomenon of the past. Clyde & Co partner, Darryl Smith, highlights the issue, emphasizing how AI inaccuracies could impact various insurance policies, sometimes without immediate detection. - read more

AFCA Supports RAA Insurance in Vehicle Location Dispute 24 Apr 2025: Paige Estritori An insurance dispute over the location of a vehicle culminated in the Australian Financial Complaints Authority (AFCA) backing RAA Insurance in their decision to deny a claim. The issue surrounded the policyholder's claim that her son’s car was stored in South Australia, while the vehicle was allegedly used and registered in Victoria. - read more

AFCA Sides with Homeowners in Landmark Insurance Dispute Over Property Cracks 22 Apr 2025: Paige Estritori Homeowners recently secured a favourable ruling against their insurer after a water leak led to significant structural damage. After large cracks emerged on their property, Youi initially denied the insurance claim, attributing the damage to pre-existing issues like earth movement and tree root intrusion, both of which are exclusions in their policy. - read more