An “avid car collector” who was not paid when his VW Kombi was sold will not be covered for his loss after the dispute authority found his insurance policy should not respond. 

The owner lodged a claim in February last year after receiving no money for the sale of the classic van, which had been insured under an agreed value of $150,000.

He initially bought the vehicle from a third party, referred to as AS, in January 2018. The van was kept at a workshop while AS oversaw its restoration.

With the owner’s consent, AS began trying to sell the vehicle in September 2020, then told the owner of a $125,000 offer made on May 4 2021. 

AS told the owner a deposit had been made and he would pay the owner “[as soon as possible] when we have settled”. The seller contacted the owner for his date of birth and licence number on May 11, which the man provided.  

AS then told the owner on May 19 and May 25 that he would be paid, but no payment was made.

The owner visited the workshop on May 26 and discovered it was closed and all vehicles had been removed.  

An invoice dated the same day showed AS sold the vehicle for $120,000. The seller did not pay the owner and declared bankruptcy in March 2022, with the owner listed as an unsecured creditor.

The owner told RACQ Insurance he did not authorise AS to sell the vehicle and it had been stolen, as stated in a police report. He wanted cover for the loss under the policy’s agreed value.  

The insurer said the van was not stolen, because the man had an understanding with AS that it was going to be sold.  

It acknowledged AS had taken the sale proceeds, but said this occurred after the policy expired on May 13 2021. It also said the policy did not cover theft of money from a sold vehicle.

An Australian Financial Complaints Authority panel says AS sold the vehicle with the claimant’s knowledge and approval, and did not receive the proceeds until after the policy expired.  

It agrees the insurer was entitled to decline the claim.  

“The panel acknowledges that the complainant may have been the victim of a crime perpetrated by AS,” it said. “However, for the reasons the insurer has identified, he has not established a claimable loss under the policy.”  

AFCA requires RACQ Insurance to increase to $1000 its compensation for self-acknowledged “poor claims handling”, which related to delays, communication shortfalls and errors.  

Click here for the ruling.