RACT Insurance has lost a dispute with a motor policyholder whose claim for damage to his car during a single-vehicle accident was declined because the tyres were assessed as “unsafe and unroadworthy”.

The Australian Financial Complaints Authority (AFCA) upheld the preliminary view of its case manager who had looked into the dispute, ruling the insurer has not shown that the condition of the tyres caused the accident on a major highway in May last year.

RACT Insurance did not agree with the case manager and the dispute was subsequently referred for determination.

The insurer says it can decline the claim, submitting it met the exclusions for cover as outlined in the policy’s product disclosure statement (PDS). The PDS says a claim can be refused if the insured car is not kept in good order, if the car is being used in an unsafe condition and being driven in a reckless manner.

RACT Insurance provided assessments from two motor experts it has engaged to support its position.

A motor assessor who examined the vehicle five days after the accident concluded the tyres were “bald, unsafe, unroadworthy and had directly contributed to the accident”.

According to the assessor, the rear tyres were completely bald with only a faint tread line remaining while the front tyres had only marginally more tyre tread but these were still below the tread wear indicator markers.

The assessor says the front tyres had worn down to the indicator marker and beyond to about a depth of only 0.5mm, below the minimum legal standard of 1.5mm.

RACT Insurance also alleges that the complainant had not renewed the tyres on the motor vehicle since it was purchased. The complainant has provided a copy of a receipt for fitting of tyres approximately 61,000 kilometres prior to the accident

The arguments failed to persuade AFCA to overturn the preliminary view of its case manager.

“On information provided to me I am not satisfied that the insurer has been able to show that the condition of the vehicle or the driving could be reasonably regarded as being capable of causing or contributing to the loss,” AFCA says in its ruling.

“Whilst I accept that the insurer has provided information in support of the claim including [the motor vehicle assessor’s] inspection of the motor vehicle and in particular of the tyres, nothing has been provided by the insurer that shows that the accident was caused by the exclusions.”

According to AFCA, the assessor has not provided any information to show how the condition of the tyres caused the accident.

AFCA notes also that while the police had investigated the accident, it does not appear they considered the circumstances warranted the driver being charged for any offences.

Details contained in the AFCA ruling showed the complainant called the insurer after the accident, saying he “just completely aquaplaned”. The transcript of the call was provided by RACT Insurance.

The complainant said he had been behind a bus for quite a while before deciding to overtake it and this was when the larger vehicle threw up a lot of excessive water, causing his car to aquaplane.

“In the circumstances the complainant’s description of the excessive water on the road way, and the lack of supporting information that the vehicle only aquaplaned because of the condition of the motor vehicle, I am satisfied that the accident might have occurred regardless of the condition of the motor vehicle or the driving of the complainant,” AFCA says.

“I note that the complainant was driving below the speed limit on a major highway and that he had be following the bus for some time and therefore had not recklessly chosen to overtake.”

AFCA says the insurer is to settle the claim under the terms and conditions of the policy.

Click here for the ruling.