A complainant whose vehicle was stolen during an unaccompanied test drive will not be compensated after his actions were found to have contributed to the event.

The claimant suffered the loss after attempting to sell his 2018 Volkswagen Multivan to a potential buyer in April 2021.

The insured said he had been facing difficult financial circumstances and had his father, referred to as L, help him with the sale.

L said the thief had faked interest in the vehicle and attended the elderly man’s home to inspect the car.

L stated he intended to accompany the potential buyer on a test drive but was unwell. He said the thief had left house keys as “collateral” and provided him with their name and home address, which had been nearby.

The vehicle was later found badly damaged by the police, and the name and address provided by the thief related to a deceased person.

Allianz declined the claim, saying that the policy laid out an explicit set of responsibilities relating to the complainant’s duty of care, including instructions to accompany test drivers while they drove the vehicle.

It relied on a policy exclusion relating to “reasonable steps to safeguard” the vehicle, which it said L failed to uphold as the claimant’s representative.

The insurer referred to section 54 (2) of the Insurance Contracts Act 1984 (Cth), which it says allowed it to refuse to pay a claim if the policyholder’s conduct helped contribute to the loss.

The complainant said the insurer’s decision had been unfair and that he did not allow the van to be driven unaccompanied. He also noted that his father had been unwell and may not have been in control of his actions.

The Australian Financial Complaints Authority (AFCA) acknowledged the insured’s difficult circumstances but said the policy’s PDS laid out a clear obligation and instructions regarding test-driving vehicles to potential sellers.

AFCA said that the supplied medical information only suggested that L’s condition could have contributed to his decision not to accompany the driver, but in any case it was not an answer to the insurer's position.

The ruling said that Allianz appropriately informed the man of his responsibilities and that L, on the insured’s authority, breached the policy’s terms by failing to accompany the thief on the test drive.

“As the vehicle was stolen during a test drive, a policy exclusion has been triggered,” AFCA said.

“Allowing the unaccompanied test drive could reasonably be regarded as being capable of causing or contributing to the claimed loss.

“Therefore, while the circumstances of loss are very unfortunate, it would not be fair to require the insurer to pay the claim.”

Click here for the ruling.