The owner of a 2012 Holden Volt hybrid vehicle whose battery was damaged by a thunderstorm will be covered for her loss after a dispute ruling found her insurer did not have grounds to decline the claim. 

The vehicle owner says her car’s lithium-ion battery had been damaged by a power outage during the storm in late October 2021. She says the vehicle would no longer charge when connected to a power outlet and lodged a claim on her comprehensive motor policy in March last year. 

The insured provided a report from her repairer, who advised that the battery was likely damaged due to “power supply issues/event that occurred when vehicle connected to grid at time of original failure”.

QBE acknowledged that there had been active storms at the home’s location during late October 2021 but did not accept that it caused damage to the battery. 

The Australian Financial Complaints Authority (AFCA) said the insured had established a valid loss and challenged the insurer to show that it was entitled to decline the claim. 

A QBE-appointed loss adjuster, referred to as SW, reported the vehicle probably sustained a “breakdown of some nature”. 

SW notes that the vehicle’s chargers had not been damaged and assumes that no over-voltage or power surge event caused the loss.

The loss adjuster says there had not been enough information to “provide commentary on the component/s or cause of failure within the battery,” and says the timing of the storm was “coincidental”. 

SW also highlights a service bulletin from April 2013, which mentioned that there had been a fault with the vehicle’s battery. 

The insurer says it was “clear” that the loss was an electrical breakdown “as the battery forms part of the electrical system”.

But, AFCA was not persuaded by QBE’s argument, noting SW’s report was unable to identify what caused the battery damage. 

“I do not find SW’s report to be persuasive,” AFCA said, “This is because SW says the vehicle has ‘sustained a breakdown of some nature’ but, does not say what has broken down or how.

“SW’s report also does not show the damage was caused by electrical failure or breakdown.”

AFCA acknowledged the insurer’s reference to the service bulletin from 2013 but says the available information shows that the vehicle underwent a software upgrade to address this issue and had otherwise been “well maintained”. 

The ruling determined the insurer failed to show that it was entitled to decline the claim and required it to repair or replace the battery, as well as pay the complainant $1206 for the cost of her mechanic’s report. 

“The outcome is fair because the complainant has met her onus to show a loss of a type covered by the policy,” AFCA said.

“This means the onus transfers to the insurer to show it is it is entitled to deny the claim or reduce its liability.

“The insurer has not met this onus, so it would be unfair in the circumstances for the insurer to be entitled to deny the claim.”

Click here for the ruling.