A complainant who received a gift card as a settlement for a broken laptop has successfully challenged her claim outcome after a dispute ruling determined that the card gave her “limited options” to find a like-for-like replacement.

The woman established a claim for accidental damage to her son’s laptop screen, which Virginia Surety deemed as a total loss after it said the replacement part was no longer available.

The device insurance policy stated that it provides the insurer with the option to provide a replacement item or pay the complainant a “covered amount,” defined as the original price. The covered amount for the laptop was deemed to be $560, with a policy excess of $75.

Virginia Surety provided the policyholder with a gift card for $485 through its own authorised representative and retailer to cover the laptop’s replacement.

The claimant disputed the offer, saying the amount was insufficient for her to find a replacement laptop that would be equivalent to her previous item and argued that the policy wording had been misleading.

The Australian Financial Complaints Authority (AFCA) said the policy’s wording had been “clear and unambiguous” with the selection of settlement options. It noted that the complainant purchased the original laptop at a discounted price, and the cover amounted to the price she bought it for.

The ruling accepted the claimant’s argument that the gift card “limited her option” for a replacement laptop, as she could only use it at a single retailer.

It said the policy “clearly states the insurer will ‘pay’ which indicates a cash settlement” and did not support the insurer’s gift card offer.

“She could not consider other retailers who might have offered more competitive prices or better products,” AFCA said.

The mother said she had already used the gift card to purchase a replacement laptop as it had been the start of the school year, and her son “urgently needed” it.

AFCA awarded the complainant $250 in non-financial loss compensation for the insurer’s gift card offer, saying if she had been awarded a cash settlement, she could have had more purchasing options.

The determination rejected the claimant’s allegation that Virginia Surety had unreasonably delayed assessing and settling the claim.

It noted that while the loss occurred in December last year, the insurer only received the damaged laptop on January 17 this year and finalised its offer on February 9.

Click here for the ruling.