A complainant who had his vehicle stolen by a would-be purchaser will not be compensated for his losses after a dispute ruling supported his insurer’s application of a policy exclusion. 

The initial police report of the incident recorded that the owner had met with the thief for an inspection and test drive, after which the two parties agreed a deal for the sale of the vehicle. 

The claimant told police that the third party had asked for the vehicle’s keys to visit an ATM after there had been a delay in the transfer of funds to his bank account. 

He said he had resisted the idea but proceeded to give the third party the keys after she handed him her bank and Medicare card.

But the thief did not return and was uncontactable. The vehicle was later found by the police but had been damaged.

The complainant lodged a claim with Pacific International Insurance, seeking for the vehicle to be repaired to its pre-damaged state or paid out for its agreed value. He also asked the insurer to cover the vehicle’s towing, storage and salvage expenses.

But Pacific International Insurance declined the claim on the basis that its policy excluded losses stemming from car sales in which the vehicle is given to the new owner before the insured receives the purchase price in full.

An updated police report recorded a different recollection of events, with the complainant saying the thief had “swiped the keys” from the table behind him while paperwork was being signed. 

The Australian Financial Complaints Authority (AFCA) acknowledged that the complainant’s altered testimony had been similar to an earlier description of events he provided the insurer over email, in which he says the thief had “stolen the key unbeknown to myself”. 

But AFCA noted the complainant’s amended recollection of events to the police and the insurer had come following indications from a phone conversation with an insurer representative that the claim would be denied. 

The ruling says it considered it “more likely than not” that the claimant had allowed the third party to take the key, with an understanding that the Medicare card and bank card acted as “security” for her return to the sale.

It acknowledged that the man felt that the initial police report had been “rushed” and that he had been “traumatised at the time,” but says the decision process of AFCA puts “more weight on contemporaneous information, in the overall context of the claim”.

“Having regard to the available evidence as a whole, I am not persuaded by the complainant’s updated statement about how the third party obtained the car keys,” AFCA said.

“There is no indication, in any of the statements, that the complainant attempted to stop her taking the key when it became apparent she was doing so, and was heading to the vehicle to drive off.

“I consider that by handing the key over/allowing it to be taken in that way, the complainant was effectively giving her the vehicle.”

AFCA also says it was reasonable to accept that the car had been sold at the time of the theft, as the complainant told the insurer in the initial phone call that he and the purchaser had “filled in the forms”.

“I acknowledge the loss of his vehicle has been deeply upsetting for the complainant,” AFCA said. 

“However, I do not consider the evidence shows the insurer has acted unreasonably or inappropriately in its handling of the claim.

“It would not be fair to require the insurer to pay a claim for a loss which is excluded under the terms of the policy.”

Click here for the ruling.