A driver whose utility terrain vehicle (UTV) suffered a total loss after a beach accident will not be covered by insurance after losing a claims dispute.

The claimant’s broker, referred to as CI in the Australian Financial Complaints Authority (AFCA) ruling, arranged a policy with Allianz to cover the vehicle just weeks before the accident occurred.

Allianz denied the claim based on an exclusion for off-road usage, saying the policy only covers accidental damage on roads that governmental agencies maintain.

The broker argued that the insured vehicle was clearly for off-road use, and that the insurer's representative sold " a junk policy".

But AFCA determined the insurer was entitled to decline the claim in accordance with its policy, and it was up to the broker to ensure the cover was fit for purpose.

The complainant insured his 2014 CF Motor Tracker 800 UTV on January 6 last year. On January 24, while riding on the beach, the driver said he turned the vehicle and hit soft sand, causing it to “stop dead” and roll over.

The claimant’s broker lodged a total loss claim to Allianz on January 28 but it was denied after the insurer said its policy excluded off-road damage.

CI argued the policy wording for the exclusion was hidden, and could not be applied to this incident.

AFCA said the documents provided to the policyholder informed him what incidents would be excluded from cover.

CI said the motorcycle policy was not applicable for the vehicle and that DU, an authorised representative of the insurer, breached the Insurance Contracts Act and General Insurance Code of Practice.

The broker said they informed DU that the vehicle was not registered for road use and that it was obvious that the vehicle would be used off-road.

CI said the policy was explicitly for motorcycles and that DU had a duty of care to highlight the off-road accident exclusion.

AFCA dismissed CI’s assertions, saying the insurer had no requirement to point out any specific policy that may have been more applicable.

It said the onus was on CI, as the complainant’s representative, to ensure the policy was suitable for their client’s needs.

The determination ruled that the Allianz did not have to cover the claim. The broker confirmed it provided a settlement for the complainant on November 29 last year for his loss on a commercial basis.

Click here for the full ruling.