Complainants whose vehicle was stolen from their property and later found burnt out have won their dispute against their insurer, which alleged that they provided inaccurate statements to have the claim accepted.

The claimants held a motor vehicle policy with Hollard for their car, with an insured value of $49,147. The male complainant contacted the insurer to lodge a claim on October 9 2020, after the police informed him that the missing vehicle had been found charred in a nearby suburb. The suspected theft was determined to have taken place on the night of October 7.

The man said he did not notice his car had been missing and was asleep when police called him the night the vehicle was found. He said he tried to return the police call in the early hours of the morning but was unable to make contact.

Hollard denied the claim, saying that the complainants provided false and misleading information to “persuade the outcome of the claim”.

The insurer said the vehicle was placed on sale months before the incident and was “superfluous to their needs”.

The insureds challenged Hollard’s assertions, saying the vehicle was occasionally used and while it had been expensive to run, they “did not want to just give it away”.

The Australian Financial Complaints Authority (AFCA) sided with the claimants, saying that the information provided by Hollard was “insufficient” to back up its allegations. The insureds had no financial pressures and earned enough money to cover their expenses, it noted.

AFCA acknowledged that the male complainant had the opportunity to commit an offence and that there had been no witnesses but said other circumstances would have to complement the insurer’s view that their claim was misleading.

“I accept it is possible for the complainant to have left his home and set fire to the vehicle. It is also possible that a person or persons having stolen the vehicle for whatever reason and then having used the vehicle for whatever purpose, set fire to the vehicle,” AFCA said.

The insurer pointed to inconsistencies in the man’s account of his movements on the day of the theft and inaccurate documentation records on the vehicle’s purchase price.

The claimant admitted that he did have memory difficulties and notably relied on his diary when answering questions from a Hollard investigator.

The ombudsman said anomalies existed in some of the referenced financial records but said the attacks on the policyholder’s character and credibility were “limited”.

An insurer-appointed forensic locksmith said the vehicle was likely opened by a replicated key fob or the existing key rather than by force but admitted that extensive fire damage to the car’s systems “made it impossible” to obtain information from the affected parts.

The expert noted that the car’s key fob was not functional but said it could have had its signal transmitted by a relay attack or a newly programmed key fob.

The insurer said that the complainant had access to the only known functional key and that the possibility of the vehicle being towed to the recovery location was “highly unlikely”.

The claimant acknowledged that the key fob provided by the insurer did appear to be his but said he had been unaware of any damage to it as it was not in his possession for quite some time.

AFCA said the damage to the key fob was “unusual” but said it was most likely that the vehicle was driven to the location. It determined that neither the expert’s report nor the insurer’s arguments pointed directly towards the complainant committing the act but instead raised the possibility.

The ruling said AFCA was not satisfied that the insurer’s allegations had been proven and required it to cover the claim as well as remove any mentions of the policyholders deliberately making false statements from their record.

Click here for the ruling.