A husband and wife seeking compensation from their broker over the value of their Polaris quad bike have lost a claim dispute.

The couple had farm insurance organised through Benton Insurance Services. In mid 2020, they purchased the bike for $9000 and requested it be added to the policy by the broker.

The following March, the bike was involved in an accident. The insurer deemed the bike a total loss and initially assessed the market value to be $6500.

The couple considered the market value should be at least $12,000 and following negotiations, the insurer agreed to settle for a pre-accident value of $9000, less excess of $200 and salvage of $500.

The couple went to the Australian Financial Complaints Authority (AFCA), saying they had requested Benton insure the bike for $12,000 and seeking compensation for the difference of $3000.

AFCA said the loss claimed was not caused by the broker’s actions and ruled it had followed the couple’s instructions when both insuring the bike and renewing for $9000.

Even had the broker insured the bike for a sum insured of $12,000, AFCA said it was unlikely to have changed the settlement outcome because the insurer ultimately determined its market value to be $9000.

The husband had emailed the broker in June 2020 saying “Polaris are no more in Australia … if anything happen it start from 12k min if not more … Please make sure our insurance is up to date.”

The broker replied in an email: “Can you please advise regarding the sums insured for the Polaris. I am unable to get an agreed policy anywhere for these items. All insurers only offer a market value. What is the “new one that cost me 9K". Is this a Polaris ATV or something else. I am not sure what you need.”

The husband replied “yes the new one costed me 9k”.

A broker invoice dated June 19 2020 had an attached Schedule of Insurance that noted the policy was endorsed to add a new Polaris ATV with a sum insured of $9000, and showed the bike was insured for “market value but limited to $9000”. The invoice was paid five days later.

The husband told AFCA it should have been clear he was not satisfied with the $9000 sum insured from his earlier correspondence stating there was “no Polaris and equivalent cost $12K”.

The ombudsman ruled it was reasonable for the broker to rely on the June 19 email to include a sum insured of $9000.

“The complainants did not clearly tell the broker they wanted the bike to be insured for $12,000. They also did not query the insured amount disclosed on the invoice and schedule of insurance before they paid it,” the AFCA ruling said.

The couple renewed with a different insurer in May 2021, a few months after the accident. The invoice from Benton dated May 4 2021 noted the unregistered 2020 Polaris Quad Bike had a sum insured of $9000 or market value, whichever was the lesser.

The couple provided examples of a 2016 model quad bike on sale for $8995 and a 2017 model for $7990, as well as their newly purchased Segway quad bike bought in September 2022 for $14,990, which they said was the only type of quad bike available in Australia at that time.

AFCA was not satisfied the market value of the Polaris bike was more than $9000 and said examples were for bikes from earlier years and were “asking prices, not sale prices”.

“There is no information to show the complainants queried the sum insured prior to the renewal of the policy,” the ombudsman said.

“I acknowledge the complainants’ comments about the scarcity of quad bikes, but they have not provided any further information to show the market value or pre-accident value of the bike in March 2021 was $12,000 or more than $9000.

“The new bike they purchased is not comparable – it is a 2022 Segway not a 2020 Polaris.”

The husband said Benton had increased the insured value of his other quad bikes to $15,000 in 2022 after his issues with the bike claim, and argued this was evidence the insurer could have included a higher sum insured in 2020 and at renewal.

“I am not satisfied this is the case,” the ombudsman said. “It is likely the insurer would still have only paid $9000 as it would have been the lesser of market value or $12,000.”

The bike owner also said if the sum insured had been greater, the bike may not have been deemed a total loss.

AFCA said that as the total loss was determined on the market value – not the sum insured – this would not have changed the outcome.

See the full ruling here.