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AFCA rules worn car tyres fall under policy exclusion

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A complainant whose motor claim was denied by Suncorp because the rear tyres on his car were in poor condition, triggering an exclusion in his policy for vehicles that are not roadworthy, has lost his bid for compensation.

The Australian Financial Complaints Authority (AFCA) ruled the insurer was entitled to rely on the exclusion to deny the claim, despite the claimant’s assertions that bad weather conditions caused the incident two years ago.

“There does not have to be a direct causal link for the exclusion to apply,” AFCA said in its determination. “There at least has to be evidence to show the unroadworthy nature of the vehicle was involved with the loss.”

A forensic specialist hired by Suncorp to inspect the claimant’s vehicle, a 2006 Holden Commodore VZ utility, found the rear tyres were “worn well beyond” the required minimum tread depth of 1.5mm. The tyres failed five of the 10 check points reviewed by the specialist.

The specialist concluded the conditions of the tyres would increase the likelihood of the vehicle aquaplaning when on a wet surface and significantly increase its braking distance. He also accepted other factors such as road conditions, driving speed and height of water on road surface are also important factors to take into consideration.

The claimant, who was 17 when he took out the comprehensive cover, had argued bad conditions at the time of the incident on August 30 2018 were to blame. He was driving to his girlfriend’s home in heavy rain when he lost control of his vehicle, which skidded off the road and hit the fence of a nearby property.

But AFCA says it was clear that that insurer had proved the vehicle was not roadworthy at the time of the loss.

“The insurer says the forensic evidence shows the rear tyres had significant wear and were not to the acceptable standard,” AFCA said. “This uncontradicted statement from a forensic expert is sufficient evidence to permit the insurer to say the loss was caused by the condition of the rear tyres.

“This means it can rely on the stated exclusion to deny the claim.”

AFCA also dismissed other matters raised by the claimant, including the insurer’s decision to continue to charge him premiums while the loss was being assessed.

“It has since denied the claim and refunded the premium payments back to the time of the loss,” AFCA said. “This is an appropriate resolution because if the claim was accepted, then the premiums would have been payable.

Click here for the determination.