A car owner who failed to notice her insurer refunded a $1400 renewal premium as she paid it nine days too late and with an incorrect reference number and no name attached has lost a claim dispute.

In September last year, eight months after the lapse of her comprehensive motor cover held with Aioi Nissay Dowa Insurance Company Australia, the woman’s daughter was involved in an accident in the vehicle.

The woman was unaware of the cover lapse and tried to lodge a claim but was told there was no longer a policy in effect and the claim would not be paid.

She told the Australian Financial Complaints Authority (AFCA) she made the policy renewal payment and provided a receipt from the previous January as evidence. She said Aioi Nissay Dowa never contacted her to inform her it did not accept the payment and she was unaware it had been refunded.

Aioi Nissay Dowa said the cover had already lapsed prior to her late January 2020 payment, and it refunded this within a week to her credit card as it was unable to allocate the funds to a policy number and was unsure what the payment was for.

AFCA agreed there was no policy in force at the time of the loss and there were no grounds for the woman to be entitled to cover.

“There is no cover due to the complainant failing to pay the outstanding renewal on or before January 2 2020, identify the correct reference number when paying the account (and) check her bank statement to learn the payment had been returned,” AFCA said.

“The onus is with the complainant to ensure she has insurance cover. This includes ensuring the relevant payments are made and up to date,” AFCA said.

“It would not be fair to compel the insurer to pay a claim when there was no policy in force at the time of the loss.”

The quoted reference number on the woman’s late payment was in fact the insurer’s BPAY biller code and did not correspond to the policy reference or identify the woman’s name.

“There was no reasonable way for the insurer to identify the payment was for the policy renewal,” AFCA said.

Two days before her policy was due for renewal on December 19 2019, the woman enquired about a pay by the month option. The insurer permitted her a two-week grace period to decide and/or pay her outstanding premium for renewal by January 2 2020.

She did not make this payment due date and the cover lapsed.

Nine days later, on January 11 2020, she paid $1394 by credit card to renew the policy.

Aioi Nissay Dowa refunded this to the woman’s credit card on January 17 2020. The policy did not renew and she had no cover.

AFCA said Aioi Nissay Dowa made no error, offering renewal, sending a reminder and permitting an extension of time and refunding the late payment when it was unable to ascertain what it was for.

The woman did not check her statement and missed the refund, and it was this that left the policy unpaid.

“I accept the complainant genuinely believed she had a policy in force and would be covered for her loss. Even so, I also accept the policy lapsed when the insurer did not receive the renewal payment by the due date. I am of the view it would be unfair to compel the insurer to pay the claim,” the ombudsman said.

AFCA noted the insured vehicle was purchased under a finance agreement and the woman had an obligation to insure her vehicle but said that “does not make the insurer liable for the loss".

See the full ruling here.