AFCA Supports RAA Insurance in Vehicle Location 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.

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
Author: Paige Estritori
Sources

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Budget Direct Achieves Top Honors as Australia's Insurer of the Year

21 Mar 2026: Paige Estritori

Budget Direct has been honored with the inaugural 'Insurer of the Year' title at the 2026 Finder Provider of the Year Awards, solidifying its position as a leading choice for Australians seeking exceptional insurance coverage. This recognition is accompanied by four additional category wins, making Budget Direct the most awarded provider in this year's ceremony. - read more

Australian Insurers Advocate for Legislation Against Unfair Claims Practices

21 Mar 2026: Paige Estritori

The Insurance Council of Australia (ICA) has expressed strong support for the proposed Competition and Consumer Amendment (Unfair Trading Practices) Bill 2026, which aims to establish a general prohibition on unfair trading practices within Australian Consumer Law. This legislation is designed to empower regulators to take decisive action against predatory operators, particularly within the claims management sector. - read more

Significant Rise in Private Health Insurance Premiums Set for April 2026

21 Mar 2026: Paige Estritori

Australians are bracing for a substantial increase in private health insurance premiums, with an average rise of 4.41% scheduled to take effect from April 1, 2026. This marks the most significant hike since 2017 and is expected to place additional financial pressure on households already contending with the rising cost of living. - read more

Insurance Council Declares Significant Events for Northern Territory and Queensland Floods

21 Mar 2026: Paige Estritori

The Insurance Council of Australia (ICA) has declared Significant Events in response to the severe flooding that has recently impacted communities in the Northern Territory and Queensland. This declaration aims to expedite the insurance industry's response and provide necessary support to affected residents. - read more

Insurance Australia Group Enhances 2026 Outlook Following RACQ Insurance Acquisition

21 Mar 2026: Paige Estritori

Insurance Australia Group (IAG) has revised its fiscal 2026 outlook upwards, following the successful acquisition of the Royal Automobile Club of Queensland's (RACQ) insurance arm. This strategic move is set to bolster IAG's presence in the Queensland market and drive substantial growth in the coming year. - read more

Click for more Insurance News