A complainant whose vehicle was wrecked after his son crashed it will not be covered after a dispute ruling determined his insurer’s decision to rely on a “reckless driving” exclusion was valid.

The father lodged a claim on January 4 last year after his son, referred to as J, lost control of the vehicle near a roundabout and collided with a tree before hitting a fence at about 1.30am that day. J suffered severe injuries from the crash, and the car was deemed a total loss.

RAC denied the claim after its investigators determined that J had been driving 180 km/h in the 50 km/h residential zone “around the corner” from where he lived. J was also charged and later convicted of reckless driving.

The insurer relied on a reckless driving exclusion within the comprehensive motor vehicle policy that prohibits cover for events that “involve deliberate exposure to exceptional danger or any wilful or reckless act”.

A report from a motor vehicle accident consultant declared that the speed J reached could “only be achieved through prolonged and wilful acceleration,” saying that his actions constituted reckless driving “in the ordinary sense of the word”.

The Australian Financial Complaints Authority (AFCA) also heard that J had a 0.14 blood alcohol content (BAC) but was not charged with drink driving due to delayed sampling collection. RAC elected not to rely on the policy’s BAC exclusion.

The claimant alleged that RAC investigators told him the claim would be covered if alcohol consumption was involved in the crash. The insurer denied that and said its investigator advised the man that if it relied on the BAC exclusion, “different action would be taken”.

The man also said that he could not “reasonably have known” that J would drive recklessly or over the legal alcohol consumption limit when he allowed him to use the vehicle and that the policy should still cover the claim. He said the insurer would "retain the right to pursue a recovery from J".

The ruling rejected the claimant’s arguments, saying the insurer’s denial rested on the “wilful and reckless conduct” of J, which it said was the proximate cause of the damage.

It noted the complainant’s admission that J knew the area well as he had lived there for over six years, saying that the driver sped “with a reckless indifference to the potential consequences (which eventuated)”.

“The speed, the effort necessary to reach it, the area where J was driving and his familiarity with it meant he deliberately, wilfully or recklessly exposed the car, himself and his passenger and the public to exceptional danger,” AFCA said.

“While alcohol may well have contributed to J’s reckless indifference to the consequences of driving as he did, it was not the dominant cause of the accident.”

Click here for the ruling.