A complainant has lost her claims dispute after it was revealed she bought her policy minutes after her car was set on fire.

The claimant purchased the car insurance policy at 4am on June 10 last year and lodged a claim the next day after her car was engulfed in flames.

IAG denied the claim after a police report noted CCTV footage that showed the fire was set sometime around 3:15am on June 10, before the complainant took out the policy.

The report also detailed that the fire department received three phone calls at about 3:42am and confirmed that the fire was put out 10 minutes later.

The woman said she asked her daughter to buy the policy and only discovered the damaged car at 10am on June 10.

The complainant said she didn’t trust the police report but provided no information to show that the fire occurred after the policy was purchased.

The Australian Financial Complaints Authority (AFCA) said IAG was entitled to deny the claim as all available information indicated that the complainant bought the policy after the damage.

The ruling dismissed the complainant’s notion that the insurer should not have towed her vehicle if it was going to deny her claim, saying the decision was reasonable because it did not know the claim was invalid at the time.

AFCA also shot down the policyholder’s argument that the claim had been mishandled and unreasonably delayed.

The insurer received the police report on July 27 last year and asked the car owner about its findings three days later. It also interviewed the complainant’s daughter on August 9 and informed the policyholder that it had denied the claim on August 11.

AFCA said the handling of the claim was in line with the General Insurance Code of Practice, which requires insurers to decide whether to accept or deny a claim within ten days of receiving all relevant information and completing enquiries.

The ruling determined that IAG had reasonable grounds to deny and appropriately handled the claim.

Click here for the ruling.