Leaving the Scene of an Accident Results in Denied Insurance Claim
Why Fleeing an Accident Can Void Your Insurance Coverage
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.
Getting into an accident can be a traumatic and stressful experience for anyone.
However, having a claim denied by the insurer for not adhering to their policy's conditions can add frustration and confusion to an already difficult situation.
Recently, an insurer in Australia declined a claim after the driver left the scene of the accident.
But was it the right decision? Let's take a closer look.
The Incident
In May of last year, the driver of a Porsche 911 Carrera S Cabriolet crashed into a shed while returning home to pick up his wallet. The incident occurred late at night, and the driver reported that he had "lost concentration" while turning a poorly lit corner. After hitting a gutter, the car collided with the shed.
Investigation and Dispute
Following the crash, the insurer appointed an investigator who interviewed the driver and inspected the circumstances of the incident. The report identified that the driver crashed his car while returning home to pick up his wallet. Additionally, the driver reported feeling disoriented and having issues concentrating due to a lack of sleep from mental health issues and ongoing divorce proceedings.
The police also attended the scene and observed that both the driver and passenger doors of the car were wide open. They charged the driver with negligent driving and a failure to give particulars, which the insurer interpreted as a breach of their policy's conditions, specifically, a failure to "not leave the scene of an accident until lawfully allowed to do so."
The insurer argued that the driver's decision to leave the scene prejudiced their ability to assess the cause and circumstances of the accident, resulting in a denied claim. However, the driver and the insurer disputed this interpretation of events, with the driver stating that he thought he had hit a tree, not a shed. He did not realize that he had hit a building until the next morning when he returned to the scene, and he did contact the police and provide them with his particulars within 24 hours of the accident.
The Ruling
The Australian Financial Complaints Authority (AFCA) reviewed the case and determined that the insurer had not proven that the driver had unlawfully left the scene of the accident and that the available information did not support this conclusion. AFCA stated that there was "no legitimate basis" to reject the driver's statement that he thought he had hit a tree. The man had also made reasonable attempts to contact the shed owner and provided the police with his particulars within 24 hours of the accident.
As a result, AFCA concluded that the insurer should cover the driver's claim under the policy. However, they denied the driver's request for a hire car, stating that the policy only covered hire cars for "not at fault accidents." The insurer was also required to reimburse the driver for professional costs from his lawyer fees, up to a limit of $5000.
Conclusion
When involved in an accident, it is critical to adhere to your insurer's policy's conditions to ensure that your claim is not denied. However, in this case, the insurer did not have a legitimate basis to reject the driver's claim, as the available information did not support that he left the scene unlawfully. It is essential to carefully review your policy's terms and seek legal advice if necessary to ensure that you receive fair treatment in the event of an accident.
Australia's insurance industry is experiencing a significant shift as mental health conditions have become the leading cause of total and permanent disability (TPD) claims. Recent data from the Council of Australian Life Insurers (CALI) indicates that mental health issues now account for nearly one-third of all TPD claims, marking a substantial change in the industry's claim patterns. - read more
Recent data indicates a notable decline in life and income protection insurance premiums across Australia, providing consumers with more affordable coverage options. According to the latest Direct Life Insurance Report from Rainmaker Information, direct life premiums have decreased by 7% since 2024. Similarly, direct income protection premiums have seen significant reductions, with average premiums for waiting periods of 30 days and 90 days decreasing by 12% and 13%, respectively. - read more
In a significant development for policyholders, TAL has expanded its Health Sense Plus program to encompass income protection (IP) policies. This initiative, effective from August 8, 2025, aims to incentivise proactive health management by offering premium discounts to clients who engage in preventative health checks. - read more
Marina operators across Northern Australia are sounding the alarm over surging insurance premiums, with some reporting increases exceeding 300% in recent years. This financial strain is prompting urgent calls for government intervention to ensure the sustainability of the industry. - read more
In a significant move within the Australian insurance sector, Coast Insurance has appointed Stephanie Muller and Jordan Brindley as Co-Chief Executive Officers. This strategic decision underscores the company's commitment to robust leadership and sustained growth. - read more
Being prepared when it comes to life insurance claims can make a world of difference. Proper preparation helps you prevent delays and denials, ensuring that your loved ones receive the financial support promised by your policy without unnecessary hold-ups. By paying attention to the details, you can streamline the claims process, giving you and your family peace of mind during what is already a stressful time. - read more
Life insurance is an essential safety net for families, providing financial security when it's needed the most. As your family grows, the importance of having a well-structured life insurance policy becomes even more critical. In the busy lives we lead today, it’s easy to overlook this crucial aspect of financial planning. However, ensuring your coverage meets your family's evolving needs is vital. - read more
Life insurance is a fundamental component of a robust financial plan, yet its significance is often underestimated. It serves as a safety net, ensuring that your loved ones are financially secure in the event of your absence. Understanding life insurance is the first step towards safeguarding your family’s future. - read more
When it comes to life insurance, a pre-existing condition refers to any medical condition or illness that you have been diagnosed with before applying for a life insurance policy. - read more
When you’re young, life is all about new experiences and making plans for a promising future. While factors like travel, career, and relationships often take centre stage, one aspect often overlooked is life insurance. It might seem like something to consider later in life, but starting a policy while you're young can be a savvy financial move. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Term Life Insurance: A type of life insurance policy that provides coverage for a specified period, such as 10 or 20 years.
