A motorist whose Nissan X-Trail was written off in a collision with a kangaroo has argued her insured amount is insufficient, saying her insurer should up the offer so she can purchase an equivalent vehicle.

However, the Australian Financial Complaints Authority (AFCA), says the amount was clearly set out in policy documents and it was the insured’s responsibility to make sure it was sufficient for her needs.

The woman holds a Suncorp comprehensive policy for the 2005 vehicle, with the amount covered set at $4600.

In February the vehicle collided with a kangaroo and the insurer assessed it as a total loss and accepted a claim, initially offering $4331, and later upping this to $4499 based on a maximum sum insured of $4810 after a complaint was lodged with AFCA.

The complainant says the offer is unfair because the vehicle cannot be replaced with the amount offered, partly because the price of used vehicles has soared during the pandemic.

She argues the term “comprehensive cover” means the insured vehicle could be “readily replaced”, and that a reasonable person would assume they would be able to replace the vehicle with the amount covered.

She says the insurer deliberately underinsured her vehicle and seeks a fair amount to replace it with a vehicle of the same year and kilometres travelled. Correspondence with the insurer indicates she asked for $6990.

But the insurer says it correctly determined the appropriate settlement for the loss in accordance with the amount of cover purchased and the terms of the policy, and AFCA agrees.

AFCA says the amount covered was made clear in the latest renewal notice and policy terms are “clear and unambiguous”.

“I do not accept the term ‘comprehensive cover’ means the insured vehicle should be replaced,” the ombudsman writes.

“Rather, comprehensive cover indicates the cover is for all risks including accidental loss and damage, third party property damage, and other additional features and covers as set out in the policy.

“I am also satisfied it was the complainant’s responsibility to ensure the cover was sufficient to meet her needs. She had adequate time to review the policy terms.”

AFCA also says the insurer’s valuation was fair, according to industry guides.

“Even if I accept the value of this vehicle had increased because of COVID-19, on the available information, I am satisfied a fair market value of the vehicle at the time of renewal was $4810 because the industry guides derive values from actual sold prices of vehicles.”

AFCA says the insurer’s offer of $4499, which takes into account unpaid monthly instalments since the accident, is fair and no further action is required.

Click here to read the full ruling.