A man who lodged a claim for the theft of his car while it was out on a test drive with an unaccompanied prospective buyer has lost his dispute with Suncorp.

The woman who was test driving never came back and the vehicle was later discovered abandoned and extensively damaged.

Suncorp declined the claim, saying the event was not covered as the owner did not accompany the woman during the test run.

The man said he had personal safety concerns due to a previous event within his family and he thought he was taking reasonable precautions because he had the keys to the prospective buyer’s car.

The female buyer had said she was uncomfortable driving the car unchaperoned with him.

The Australian Financial Complaints Authority (AFCA) sided with Suncorp, saying the owner did not take reasonable precautions and the insurer was entitled to decline the claim.

“The precaution of having the prospective buyer’s keys was illusory. The stipulated precaution was to accompany the prospective buyer on the test drive. As this did not occur, the car was stolen and damaged,” its ruling says.

AFCA said the policy terms were clear and unambiguous that the owner must take all reasonable precautions to prevent a theft, which included accompanying anyone test driving the car when it is for sale.

“This is further amplified by the policy exclusion which makes it clear the complainant was not covered in circumstances where a loss occurred while the car was being demonstrated for private sale and where he or a listed driver was not a passenger in the car,” AFCA said.

The policy stated “you must take all reasonable precautions to prevent damage or theft, for example accompany anyone test driving your car when it’s up for sale”.

“You are not covered under any section of this policy for damage, loss, cost or legal liability that is caused by or arises from or involves test drives: loss or damage to your car while it is being demonstrated for private sale.

“We will pay a claim if your car is being demonstrated for private sale and you or a listed driver are a passenger in your car.”

AFCA did award the man $750 compensation for mistakes made by Suncorp during the claim process that it said would have interfered with his “expectation of enjoyment or peace of mind”.

Suncorp wrote to the man twice requesting a $650 policy excess when it had denied the claim, mistakes the car owner said were unprofessional and unreasonable.

On a third occasion, it wrote asking for his bank details to settle the claim, advising the claim would be settled as a total loss. Suncorp realised its mistake on the same day and said it would not be issuing a settlement and apologised for the error.

“While the mistakes have made no material difference to the outcome, the mistakes should not have been made,” the AFCA ombudsman said.

See the full ruling here.