A motor policyholder has been awarded a full payout for her stolen car and $3000 in compensation for non-financial loss after challenging her insurer’s fraud allegation.  

The woman lodged a claim after the 2013 Holden was taken from her street while parked overnight in November 2023. She reported the theft to the police, but the car was not found.  

Insurer IAG said the claim was suspicious, arguing no credible evidence was provided to show it was a legitimate loss.

The insurer referred to the findings of an external investigator who said the claimant was out of work, relied on Centrelink payments and had minimal funds in her bank account.  

IAG said these circumstances pointed to a financial motive for a fraudulent claim, and noted the vehicle was insured for $30,800, which it suggested was an overvaluation.  

The investigator said police believed the vehicle had “simply gone missing” rather than being stolen, and flagged inconsistent information provided by the complainant.

The insurer said the claimant’s speculation on where the car may have been dumped raised suspicion, along with differing comments about the number of keys she had for the vehicle.  

IAG’s forensic locksmith said it was unlikely thieves would target the vehicle because it had “two stages of factory-level immobilisation”, forming a “significant deterrent”.  

The car owner rejected the insurer’s allegations, saying she had co-operated with IAG and police at every stage, including being upfront about her finances.  

She said any mistakes or inconsistent information she provided were accidental and her speculation on the car's location was only because the area was a common dumping spot.  

The woman acknowledged there was some pre-existing damage to the vehicle but said it was “in good condition”. She said she intended to repair the damage but was stressed due to her relationship, which involved instances of domestic violence.  

In a dispute ruling, the Australian Financial Complaints Authority says it is “not comfortably satisfied that a finding of fraud is warranted or that the insurer is otherwise entitled to deny the claim”.  

It notes there was no suggestion from police or the insurer-appointed locksmith that the claimant was involved in the theft.  

AFCA’s ombudsman says there were “some inconsistencies” between the claimant and her partner’s observations on the theft, but this is not unusual and is insufficient to “comfortably satisfy me a finding of fraud is warranted”.  

The authority has told IAG to pay $3000 for stress caused by its claim handling.  

“The complainant says the insurer’s poor claim handling and allegations have caused her significant distress and have affected her mental health,” the authority said.

“The insurer made very serious allegations of dishonesty against the complainant, which it has not been able to establish. It also made assertions that were demonstrably incorrect.

“It is therefore fair that the insurer accepts the claim and compensates her for the stress and inconvenience it unreasonably caused.”  

Click here for the ruling.