SERVICE: Motor Vehicle
OUTCOME: Settled
Issues: Breach of contract obligation; Scope of cover
Mr T held insurance on his vehicle.
In July 2023, Mr T telephoned the insurer and said that the vehicle had been taken by an acquaintance, while he was in the bathroom, crashed into a neighbour’s vehicle and been returned damaged. Mr T made a claim to the insurer for the loss. Mr T reported the conversion of the vehicle to the police.
The insurer declined the claim, saying Mr T had left the vehicle unattended, and that the driver had left the scene, meaning that there had been a breach of policy conditions. In addition, the insurer said that it did not believe that he had provided enough information to determine that the claim fell within the scope of cover provided by the policy.
The case manager’s assessment
When and insured makes a claim under an insurance policy, the law says that it is up to them to prove that they have suffered a loss, which is covered by the policy.[1]
The insurer can then choose whether to apply a policy condition or exclusion to limit or decline a claim. If the insurer does choose to do so, it must prove the condition or exclusion applies.
In relation to the insurer’s belief that the vehicle had been left unattended, the case manager noted this was not correct. Mr T had given the vehicle keys to his acquaintance, who then took the vehicle without permission. Therefore, the vehicle was not unattended at any point.
In relation to the ground that the driver had left the scene, in breach of a policy condition, the case manager noted this would not apply to cases of theft or conversion. As this is what Mr T said occurred, and he had reported the matter to the police, then this was sufficient to say that the condition did not apply.
In relation to the lack of a prima facie claim, the case manager noted that Mr T had shown there was damage to the vehicle and had reported the matter to the Police. This was sufficient to show a prima facie claim in this instance. While it would have been better if the insurer could have spoken with the driver, it is often not possible to do so in cases of theft or conversion. Mr T had complied with the investigation and was not able to give the insurer the driver’s contact information. Therefore, there was no basis to decline the claim as outside the scope of cover provided by the policy.
Having discussed the matter with the case manager, the insurer accepted that it could not rely on these grounds to decline the claim. As a result, it agreed to accept the claim.
Complaint No: 00226355
[1] This is known as a prima facie claim.