SERVICE: Motor Vehicle
OUTCOME: Settled
Issues: Customer services issues
Summary: Mr P’s* complaint was not upheld, because the vehicle was economic to repair.
Mr P held vehicle insurance with the insurer, with an agreed value (AV) of $86,160.
In January 2023, Mr P was involved in a collision with a friend, at about 11.15 pm at night, causing damage to the side of the vehicle. Mr P made a claim to the insurer for the damage.
After investigating the circumstances of the accident, the insurer accepted the claim and repairs commenced in about April 2023 with the repairer. Issues arose between Mr P and the repairer, partly because of delays in parts arriving from overseas until late June 2023 and partly because Mr P had concerns about the quality of the repairs. As a result of the delays, the insurer made an ex gratia payment of $2,000 to Mr P.
Mr P complained that his experience with the repairer had been the worst customer service he had ever experienced. He also said that some further repairs were needed, but he wanted payment of the AV instead.
The case manager’s assessment
Mr P was only able to receive payment of the AV if the vehicle was uneconomic to repair. In this case, the repairs were just over $21,000, which was considerably less than the AV.
The case manager explained to Mr P that the IFSO Scheme could only consider whether the insurer had correctly applied the terms and conditions of the policy to the claim, and had no power to require the insurer to make any payments outside the terms of the policy, on a goodwill basis. As the vehicle was repairable, there was no basis to require the insurer to pay the AV to Mr P.
While there were delays throughout the claim (not all unavoidable and not all caused by the repairer) and Mr P had a poor experience with the repairer, the IFSO Scheme does not punish insurers, or award compensation for poor customer service. Further, the insurer had paid Mr P some compensation for the delays.
The insurer had accepted that some further repairs were needed. Generally, the legal position is that the insurer is liable to pay the costs to rectify defective repairs. The case manager explained that the IFSO Scheme could only require the insurer to pay these costs, which it had already agreed to do. After discussion with the case manager, Mr P agreed he would take the vehicle to a repairer of his choosing to undertake the repairs, and would provide his quotes to the insurer.
*Name has been changed
Complaint No: 00229236