Insurer's Denial Upheld for 'Reckless and Unsafe' Driver

0

The driver, who was operating a 2020 BMW X4, stated that the accident occurred at approximately 8pm on May 22nd of last year while he was attempting to navigate a bend in the road. According to the driver, he lost control of the vehicle and collided with a tree due to being startled by the bright lights of an oncoming vehicle.

Initially, Blue Zebra, the insurer, notified the insured that his claim had been approved and would be assessed as a total loss. Approval was granted for the purchase of a new vehicle for the claimant pending an interview with the driver about the accident, as well as approval from the vehicle's financier. The purchase was based on a $197,214 quote provided by the complainant.

However, despite still awaiting further claim information, Blue Zebra proceeded to place an order for a new vehicle, as it was estimated that the replacement would take about ten months to arrive. However, on August 8th, the insured informed the insurer that he had placed an order, which included a $2000 deposit, with another dealership and expected to receive the vehicle by the end of the month.

Safety Issues and Reckless Driving

An insurer-appointed motor vehicle investigator, referred to as AM, reported significant safety concerns regarding the insured vehicle at the time of the crash. These concerns included unroadworthy tires and disabled stability controls.

The investigator also noted crash data indicating that the driver was traveling 12km/h above the speed limit and took deliberate actions to increase speed moments before the accident. According to AM, the vehicle was being driven in an enthusiastic and reckless manner, exceeding the speed limit and with disabled stability controls.

Claim Denial and Disputes

Following an interview with the complainant regarding the accident, Blue Zebra denied the claim, stating that exclusions related to the vehicle's unsafe and unroadworthy condition, as well as the insured's wilful and reckless use of the car, were applicable.

The insured, however, maintains that the car was in pristine condition before the accident, having received appropriate servicing and driven only 19,000km in total. He denies any knowledge of issues with the tires and asserts that he would have addressed them if he had been aware.

Moreover, the driver disputes the accusation of driving recklessly, emphasizing that he would not have endangered himself or his son, who was a passenger at the time of the accident.

Ruling of the Australian Financial Complaints Authority

The Australian Financial Complaints Authority (A.F.C.A.) reviewed the evidence presented by both parties and concluded that the insurer was justified in denying the claim. A.F.C.A. accepted AM's report, which unequivocally established the unroadworthy condition of the vehicle, thereby contradicting the insured's assertions.

The ruling also took into account the insured's admission of driving above the legal speed limit, despite being unfamiliar with the road. Therefore, A.F.C.A. agreed that the insured was likely driving in a wilful and reckless manner immediately prior to the accident.

A.F.C.A. did, however, determine that Blue Zebra should compensate the insured for the financial losses caused by the initial indications of claim acceptance. This includes reimbursing the $2000 deposit that the policyholder had paid.

Published:Tuesday, 21st Nov 2023
Source: Paige Estritori

Share this news item:

Insurance News

Car Collector Fails in Bid for $122k Insurance Windfall 24 Jul 2024: Paige Estritori A car enthusiast's efforts to boost his insurance payout from $78,000 to $200,000 after his rare vehicle was destroyed by fire have been thwarted. - read more

Financial Advice Landscape Set for Further Overhaul 24 Jul 2024: Paige Estritori Financial industry professionals are bracing for significant changes as new reforms surrounding commission consent in financial advice have moved into effect. With the successful passage of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Bill 2024, the sector anticipates a substantial shift in how financial advisories are delivered to retail clients. - read more

Queensland Renters Face Significant Financial Risk Without Contents Insurance 23 Jul 2024: Paige Estritori Queensland renters are increasingly vulnerable to financial setbacks due to a lack of contents insurance, warns RACQ Insurance. An alarming 78% of renters in Queensland forgo this critical coverage, primarily underestimating the value of their belongings. Other reasons for this trend include the cost of insurance and a general lack of knowledge regarding coverage options. - read more

Massive Fines Hit Rogue Builders Over Fake Insurance 20 Jul 2024: Paige Estritori On July 19th, 2024, in a significant crackdown on fraudulent building practices, Aycon Constructions along with its director, Seyit Ayranci, received a record-setting fine of $250,000 from the Victorian Building Authority (VBA). The enforcement action came after the construction firm was implicated in the use of falsified insurance certificates to secure building permits. - read more

Liberty Mutual Re insurance Unit Further Solidifies Aussie Market Reach 20 Jul 2024: Paige Estritori Liberty Mutual Insurance Group's LM Re insurance unit is making impactful strides with the inception of a dedicated Australian branch. At the helm of this initiative is Mark De La Mare from Aon, who will guide the underwriting team nestled in Sydney. - read more