A claimant has failed to force her insurer to cover the gap between her car's market value and the amount she owed the finance company.

The policyholder wanted Allianz to pay an additional $7773 beyond her total loss settlement, to allow her to meet a novated lease agreement, but the financial ombudsman disagreed because she had not taken out optional gap insurance.

The complainant’s car was intentionally damaged in November 2024 by two individuals in what the police described as a “family related” incident. The suspected attackers face criminal charges over the incident. 

Allianz said the car was “uneconomical to repair,” noting that several panels and windscreens were badly damaged. It settled the claim with a cash payment based on the car’s market value of $25,000. 

The claimant says the settlement offer was unfair and that the insurer should either repair the car or provide enough money to cover the $32,773 she owed on the vehicle’s lease.  

She argues Allianz could seek restitution from the individuals responsible or should take responsibility for the payment, citing poor handling of her claim. 

As part of her complaint, she said the insurer’s agent rushed her while she was purchasing the policy and did not offer her the option to purchase gap insurance.  

She raised several other concerns regarding the insurer’s conduct, including a privacy issue after it mistakenly sent her a certificate of insurance with her policy number that contained another customer’s name. 

In a dispute ruling, the Australian Financial Complaints Authority acknowledged the claimant’s concerns but noted that emails from the insurer clearly showed she had received a copy of policy documents.  

The authority notes that these documents indicated that she did not have “total loss assist insurance”, which would have applied in her situation. 

It would not be fair to require Allianz to pay for the gap payment, it says, as the claimant likely knew she lacked the relevant coverage. 

The decision also accepted that the vehicle’s insured sum was fairly determined based on a pre-accident market data report done by the insurer, and that the policy terms dictated that it had discretion to declare a total loss, which AFCA agreed was reasonable in this instance.  

However, the authority agreed that some of Allianz’s communications caused unwarranted confusion and stress for the customer, and it should pay $1000 in compensation.  

See the ruling here.