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Determination
Case number | 12-00-1016341 |
Financial firm | QBE Insurance (Australia) Limited |
Case number: 12-00-1016341 28 June 2024
The complainant’s motor vehicle insurance policy held with the insurer was cancelled on 16 November 2022 due to non-payment of premium. The complainant‘s wife, GK, says she first became aware of this on 22 March 2023 when trying to lodge an at fault claim for a n accident on 21 March 2022.
As a result, she took out a new policy on 22 March 2022 and lodged a claim for the damage. The insurer repaired the complainant’s vehicle but now seeks to recover the repair costs. The insurer says the complainant provided the wrong accident date on lodgement of the claim.
The complainant denies this and wants the insurer to accept liability for the claim.
No. There was no policy in place when the accident happened on 21 March 2023.
No. The repair costs were incurred due to the insurer’s error. The complainant did not mislead the insurer when lodging the claim.
Yes. The insurer’s claims handling has caused the complainant an unusual degree of physical inconvenience and stress.
The outcome is fair as the insurer should not be held liable for damage to the third-party vehicle. The policy had been cancelled. However, it would not be fair for the complainant to have to repay the repair costs incurred due to the insurer's error.
The insurer's conduct has caused the complainant an unusual degree of physical inconvenience and stress. It is fair in these circumstances that compensation be awarded for non-financial loss.
This determination is partly in favour of the complainant. I am satisfied it is fair that:
This complaint has been lodged on behalf of the complainant by his wife GK. Reference in this determination to the complainant includes reference to submissions made on his behalf by GK.
No. There was no policy in place when the accident happened on 21 March 2023.
The Insurance Contracts Act 1984 (Cth) (the Act) sets how an insurer may cancel a policy.
Section 58 says an insurer must notify an insured party in writing at least 14 days before the policy is due to renew. According to section 60, an insurer can cancel the policy if the insured does not pay the premiums; but it must follow the cancellation procedure outlined in section 58.
The notices must be sent to the insured’s last known address. If they were sent by email, then under section 72A of the Act the insurer must show that the insured consented to received correspondence by email. Under the Act, insurers are not required to ensure that the insured has read or received the notices and they are not required to call or SMS.
If an insurer has not met its obligations under the Act when cancelling a policy, AFCA may decide that the policy was not cancelled.
The complainant held a comprehensive motor vehicle policy with the insurer for the period 1 November 2021 until 1 November 2022.
On 27 September 2022, the insurer says they sent a notice of renewal to the complainant via email to the complainant’s provided email address.
The insurer provided screenshots of its internal mail delivery system to support that it successfully sent the following notices to the email address:
The complainant suggests that he did not agree to receive notices via email. GK says the notices were always received by post. The complainant provided letters relating to a CTP (Compulsory Third Party) insurance policy but that is a separate policy. The letters do not refer to the comprehensive motor vehicle policy.
The policy schedule for the period 1 November 2021 to 1 November 2022 clearly notes the preferred document delivery method to be by email with the email address for GK recorded on the document. The insurer also provided a screenshot of the policy’s history from 2021. The documents show GK’s email was selected as the preferred contact method for the policy.
I am satisfied the complainant agreed to receive the notices via email.
Page one of the renewal offer states:
“Your current Comprehensive Motor Policy will expire at 4:00pm AEST on 1 November 2022. We’d like to invite you to renew your cover”
Page one of missed payment reminder sent on 9 November 2022 says:
We recently sent you your Car Insurance renewal. Although we are yet to receive your premium payment, it's not too late to pay for your policy. Don’t worry, we have kept you covered under the renewal policy’s terms for now […] if we don’t hear from you, we will cancel the policy coverage 4:00pm AEST on 16 November 2022.
The wording in the notices is clear. The notices inform of the renewal date, provide a reminder that the payment is overdue and the cancellation date. The notices offer the complainant the opportunity to pay and when the policy would be cancelled if payment were not received.
I am satisfied that the insurer had cancelled the policy in accordance with the Act. The policy was correctly cancelled on 16 November 2022. There was no policy in place when the motor vehicle accident occurred on 21 March 2023. The insurer is not liable for the damages to the third-party’s vehicle.
No. The repair costs were incurred due to the insurer’s error. The complainant did not mislead the insurer when lodging the claim.
GK took out a new policy on 22 March 2023 after being informed that the previous policy had been cancelled. The same day she lodged a claim for the damage arising from the accident on 21 March 2023.
The insurer says the complainant misled it to believe the accident occurred on 22 March 2023. In its notice of response to AFCA, it says the complainant initially provided the wrong accident date being 22 March 2022 and repairs were organised. Only when it became apparent that the incident occurred on 21 March 2022 did it seek recovery from the complainant as the repairs had been completed.
The claim lodgement call, on 22 March 2023, clearly records the complainant provided the correct date of loss to the insurer. The complainant confirmed the claim was lodged “ because I did (sic) a car accident last night.”
The confirmation letter sent to the complainant on 22 March 2022 confirms the date of loss as 21 March 2022 on the new policy records.
I am satisfied that, at all times, the complainant provided the insurer with the correct date of the accident. I am satisfied that when the insurer repaired the vehicle, it was aware of the date of the accident and aware the previous policy had been cancelled on 16 November 2022. It was aware the accident occurred on 21 March 2022 and that the policy was incepted on 22 March 2022.
I acknowledge that repairing the vehicle was an error by the insurer, but the complainant did not contribute to that error.
Although the insurer repaired the vehicle when it had not liability to do so, I do not consider it fair for it to recover the repair costs from the complainant. The complainant had the vehicle repaired by the insurer in good faith. The complainant reasonably believed the insurer had agreed to cover the repair costs. There is no information to suggest that the complainant allowed the repairs to be completed, knowing the insurer had made an error.
It is not fair in the circumstances that the complainant be held liable for the mistakes of the insurer. I am not satisfied the insurer is entitled to recover the repairs costs incurred.
Yes. The insurer’s claims handling has caused the complainant an unusual degree of physical inconvenience and stress
Under the AFCA rules, AFCA can award compensation of up to $5,400 for non-financial loss if f an insurers poor claims handling causes a complainant an unusual degree of physical inconvenience, time taken to resolve a situation, or interference with the complainant‘s expectation of enjoyment or peace of mind.
AFCA takes a conservative approach to the award of compensation and expects a person will cope with the normal stresses associated with any claim process.
If anything, the insurer has misled the complainant into believing there was cover for the accident and her liability to the third-party. I am satisfied the insurers mistakes in the handling of the claim and complaint, have caused an unusual level of frustration and inconvenience for the complainant.
I consider it fair in the circumstances that the insurer pays $1,000 in non-financial loss compensation pursuant to AFCA rule D.3.3.
The outcome is fair as the insurer should not be held liable for damage to the third-party vehicle as the policy had been cancelled. However, it would not be fair for the complainant to have to repay the repair costs incurred by the insurer due to the insurer's error. To the extent that the insurer agreed to repair the vehicle, the complainant was entitled to believe that these costs were covered.
The insurer's conduct to deny its error has caused the complainant an unusual degree of physical inconvenience and stress. It is fair in these circumstances that compensation be awarded for non-financial loss.
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 the information the parties have provided.
While the parties have raised several 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.
