An insured who sought cover under his home and contents policy for damage to his non-driveable car has lost a dispute over his insurer’s decision to reject the claim.  

The man was restoring a 1970 Mercedes-Benz 280e sedan when a winch cable attached to the vehicle broke, causing it to roll down the driveway and hit his neighbour’s parked van.  

The policyholder lodged a claim with Allianz, arguing the car could not be considered a motor vehicle because it was not driveable. He also sought cover for legal liability costs around damage to the neighbour’s van.  

The insurer declined the claim, saying the home and contents policy clearly excluded motor vehicles.   

In a dispute ruling, the Australian Financial Complaints Authority backs the insurer’s decision after referring to dictionary and legislative definitions of “motor vehicle”.  

“I acknowledge the Benz was being restored and was not in a driveable condition,” the authority’s adjudicator said. 

“However, I note the Benz was a car, built to be propelled by a motor and intended to be used on the highway. 

“I am therefore satisfied the Benz was a motor vehicle for the purposes of this claim and complaint.”  

The authority says the complainant made a valid claim for legal liability coverage. 

However, it accepts the insurer’s policy excluded claims arising from the ownership or use of a “mechanically propelled vehicle”.  

“I am satisfied a car is a mechanically propelled vehicle. This is because it operates by means of mechanism to move forward. This is also consistent with its design. 

“Therefore, the Benz is a mechanically propelled vehicle and the legal liability claim arising out of the complainant’s possession of it is not covered under the policy.”  

The authority has ordered Allianz to pay the complainant $1000 compensation for non-financial losses caused by its claims handling.  It says the insurer incorrectly disregarded the policyholder’s request for legal liability cover without addressing his concerns, which it says probably caused him inconvenience and frustration.  

Click here for the ruling.