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Determination
Case number | 1017072 |
Financial firm | RACQ Insurance Limited |
Case number: 1017072 13 May 2024
The complainant holds a comprehensive motor vehicle insurance policy with the financial firm (insurer) covering a 2005 HSV Coupe GTO Z Series.
The complainant lodged a claim for damage following an incident on 22 March 2023. The vehicle unexpectedly caught fire and burnt out on the side of the road. The insurer accepted the claim. It later declared the insured vehicle a total loss.
The insurer’s assessor calculated the pre-accident market value (PAMV) of the insured vehicle was $68,000. After the complainant expressed dissatisfaction with this amount, the insurer offered to pay $78,000. The complainant remains unhappy with the insurer’s offer and says the PAMV of the insured vehicle was around $200,000.
Yes. On balance, $78,000 represents a fair estimation of the insured vehicle’s PAMV.
The insurer has fairly assessed the PAMV of the insured vehicle. The complainant has not provided persuasive information to show his vehicle is worth more than the insurer’s offer. In these circumstances, it would not be fair to require the insurer to pay an increased settlement.
This determination is in favour of the insurer.
The insurer is not required to increase its proposed settlement offer. Outside of paying this amount (if it has not already done so), the insurer is not required to take any further action in relation to this claim or the complaint.
Yes. On balance, $78,000 represents a fair estimation of the insured vehicle’s PAMV.
The terms of the policy include the Certificate of Insurance (COI) and the Product Disclosure Statement (PDS). There is no dispute the insurer sent these documents to the complainant.
The insurer’s policy covers loss or damage caused by an incident, including a fire.
Given the damage inflicted by the fire, the insurer declared the insured vehicle a total loss.
The parties disagree over the insurer’s assessment of the PAMV of the insured vehicle and its subsequent settlement offer. The COI confirms the insured vehicle was insured for its market value. The PDS defines the ‘market value’ as:
The value of the vehicle at the time of the incident as determined by us by checking against values of similar vehicles, caravans or trailers in your local market, taking into account the age and condition of your vehicle or your caravan or trailer and the kilometres it has travelled.
The market value does not include stamp duty, warranty costs, transfer fees, registration costs and charges or dealer charges.
When an insured vehicle is deemed a total loss and insured for its market value, the PDS says the insurer will settle for this amount, less any applicable policy deductions.
The insurer’s assessor determined the vehicle’s pre-incident condition was ‘Above Average’ and assessed its PAMV at $68,000.
The complainant disagreed with this assessment and the insurer arranged for an independent motor vehicle valuer (QM) to review the vehicle’s PAMV.
In its report of 31 March 2023, QM confirmed the insured vehicle was ‘in good condition for its age and kilometres travelled’. It was not able to inspect the vehicle and relied on digital photographs.
QM reviewed examples of similar vehicles, with significantly lower mileage (91,700km to 155,000km) advertised for between $81,999 and $88,000. QM also sought input from two ‘independent car dealers’ which suggested the insured vehicle’s PAMV was between $67,000 and $70,000. It also looked at different motor vehicle guidebooks and obtained an average value estimate of $62,650.
QM wrote that the vehicle’s ‘high mileage would diminish [its] collectability’. It had travelled 315,000km at the time of the loss. Given an average value across suitably similar advertised vehicles, book guide values and independent valuations, QM estimated a PAMV of $68,000 was fair.
The complainant did not accept QM’s estimate of the insured vehicle’s PAMV. He says:
The complainant also provided examples of what he considered were similar vehicles offered for sale online. Many of these vehicles were for significantly higher values than the amount offered by the insurer. I consider most, if not all, of these vehicles were not comparable to the insured vehicle. Many were 2006 models and/or had significantly less mileage.
The insurer offered to increase its offer to $78,000 on 25 January 2024. This was to allow additional amounts for:
QM also agreed the engine was a 6.0 litre, 8-cylinder engine and the reference in its report to a 5.7 litre engine was an error. It says it had nevertheless considered the vehicle based on a 6.0 litre V8 engine.
The complainant does not accept QM’s explanation or analysis of the PAMV.
I confirm the provided pre-incident photos of the insured vehicle show it was well kept and maintained in excellent condition.
I reviewed the online Glass’s Guide to see the estimated value of this type of vehicle at the time of the loss.
As of March 2023, the insured vehicle was valued at $42,700/$50,500/$58,100 on the Glass’s three-tiered vehicle valuation method. This assessment translates to vehicles in a below average/average/above average condition.
The Glass’s Guide says a vehicle which is more than 10 years old and classified in ‘above average’ condition:
should be registered, have either low mileage/kilometres or have been restored to good condition. While it will fall short of showroom condition, there should be no evidence of any accident damage or rust.
Clearly the insured vehicle did not have low mileage, although I acknowledge it was in excellent pre-loss condition. There is also no persuasive evidence it was a ‘showroom’ vehicle or in a commensurate condition. Its regular use (evidenced by the mileage) likely means it does not qualify as a ‘showroom’ vehicle, which can have significantly higher PAMVs.
Even applying the top value at the time of the loss, the Glass’s Guide indicates the insured vehicle was unlikely to be worth more than about $58,100. However, I acknowledge the same publication valued these vehicles at $28,600 in ‘above average’ condition in May 2022. This implies a price correction and that the vehicles appreciate in value.
I further acknowledge the vehicle’s type are limited in number and highly sought after. However, I am not persuaded the exchanged material shows the complainant’s vehicle was worth $200,000.
I am also not satisfied there is sufficient persuasive evidence in the exchanged material to show the PAMV of the insured vehicle was worth more than $78,000.
I accept QM’s evaluation of the vehicle’s value is logical, well-considered and helpful.
Whilst I acknowledge the complainant provided examples of vehicles advertised online for amounts in and above this range, I do not accept the insured vehicle is similar, as:
Whilst the complainant emphasises his vehicle was of limited production and availability, the insurer’s policy cover is not for a classic or unique car.
For the reasons noted above, I am not satisfied the complainant has provided sufficient information to show his vehicle is worth more than what the insurer offered. I consider his concern focusses on the cost to obtain a desirable replacement vehicle of the same model, instead of the likely market value of his vehicle at the time of the incident.
Based on the exchanged information, I accept the insurer’s PAMV offer of $78,000 is fair.
The insurer has fairly assessed the PAMV of the insured vehicle. The complainant has not provided persuasive information to show his vehicle is worth more than the insurer’s offer. In these circumstances, it would not be fair to require the insurer to pay an increased settlement.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all of the information the parties have provided.
While the parties have raised a number of issues in their submissions, we have restricted this determination to the issues that are relevant to the outcome.
AFCA is not a court of law. We do not have the power to take or test evidence on oath, or to require third parties to give evidence.
When we assess complaints, we consider:
We give more weight to documents created at the time the events occurred. If there are no relevant documents, we will decide what most likely occurred based on the available information.
If there are conflicting recollections and these are evenly weighted, we may find that a claim cannot be established.
