A man whose car was driven by a relative without his permission and crashed in a drug-fuelled accident has won a dispute over an insurer’s decision to decline his claim.

The claimant left the car with a relative referred to as JS in Melbourne after moving interstate, permitting them to use it “from time to time.”

He said that without his knowledge, JS lent the vehicle to another relative, who allowed their daughter, known as FS, to use it while her car was being repaired. In April 2021, FS crashed the car into a storefront.

The driver admitted several charges, including careless driving of a motor vehicle, failing an oral fluid test within three hours of driving, and possession of methylamphetamine. Police said FS had “looked like she was drug-affected”, noting erratic behaviour.

Suncorp declined the car owner’s claim under a policy exclusion stating it would not cover losses caused by a driver under the influence of drugs or who recorded more than the legal intake in a blood, saliva or urine analysis. 

The insurer pointed to the police findings and a consultant pharmacologist who reported the amount of methylamphetamine consumed would have caused a “significant impairment of FS’ driving ability”. 

The claimant challenged the application of the exclusion, saying his dispute did not centre on FS being affected by drugs but on her taking the vehicle without his permission. He said the loss should be considered a theft. 

Suncorp argued the vehicle had not been stolen because no one lodged a theft report and police had not treated the incident as a theft.

The complainant said the matter was not treated as theft because he was unaware of the incident until about five days after it occurred and was unable to inform police.

The insurer accepted its policy did not define theft, but said its denial was in line with a definition in the Victorian Crimes Act 1958, which says: “A person steals if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it.”

Suncorp said FS did not “dishonestly appropriate” the vehicle because she received permission from JS and did not intend to “permanently deprive” the owner.

But the Australian Financial Complaints Authority says the insured’s argument has merit because he did not give permission for anyone other than JS to use the vehicle. 

It cites common law precedent from Lockwood & Lockwood v Insurance Australia Limited (2010) interpreting theft as being when a person “takes the vehicle without the owner’s permission in circumstances where he or she knows the owner would not consent and knowing that the degree of their interference is material and wrong”. 

The authority says it is fair to consider the loss as a theft claim based on the established precedent.

“In all likelihood, FS knew the complainant would not have consented to her use of the vehicle had he been aware of the fact she was intending to drive it under the influence of a prohibited substance,” the authority said. “The complainant made it abundantly clear in his interview with the insurer’s investigator that he would never consent to FS, a probationary driver, driving the vehicle.” 

The authority has also ordered Suncorp to pay the claimant $2000 over poorly communicated updates about the claim’s progress that “noticeably exacerbated the complainant’s frustrations and were undoubtedly stressful”. 

Click here for the ruling.