An insurer has been ordered to pay a motor claim after the industry ombudsman rejected allegations a policyholder deliberately crashed her car.

The Australian Financial Complaints Authority has also awarded the claimant $4000 for stress and anxiety caused by Suncorp’s investigation and claims handling.

And the insurer must remove all records suggesting the customer acted fraudulently or breached her duty of utmost good faith.

The dispute arose after the owner of a Hyundai Accent said she swerved off the road and hit a barrier while avoiding an oncoming vehicle travelling on the wrong side of the road.

Suncorp rejected the claim, arguing forensic evidence showed the crash was staged and that the customer had provided false and misleading information.

AFCA accepts the crash data raises questions as to whether the collision happened exactly as the claimant described, and notes anomalies in her version of events. But it says this does not establish the crash was intentional.

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The determination points to deficiencies in evidence and analysis provided by an external forensic investigator used by the insurer. It adds there were faults with the way a second investigator interviewed the policyholder.

Suncorp argued the vehicle’s agreed insured value exceeded its market value, and that the customer’s financial circumstances provided a motive to stage the collision.

But AFCA finds no persuasive evidence of financial motive, saying the insurer has failed to properly assess the claimant’s income and overall financial position.

In awarding $4000 compensation for non-financial loss, AFCA said: “The insurer’s allegations which form the basis of its claim denial are very serious and potentially damaging for the complainant going forward.

“Yet the decision to deny the claim has been shown to be based upon deficiencies in the manner in which the insurer investigated and analysed the circumstances of the insured event.

“These deficiencies have no doubt caused unnecessary stress, anxiety and upset for the complainant.”

See the decision here.