A motorist who drove through floodwater has lost a dispute over engine damage after his car trouble was blamed on improper tuning by a mechanic.

The insured lodged an initial claim for water damage in January last year, and Insurance Manufacturers of Australia provided a cash settlement of $14,729 to repair panelling and replace the vehicle’s turbo.  

But the owner said that after the repairs, the car suffered more engine problems related to floodwater intake, including difficulty starting, rough idling and heavy smoke while driving.  

He wanted a payout for additional repairs totalling $18,138, but the insurer’s mechanic found no signs of water ingress and instead reported “a large crack” in the engine’s short block.  

The insurer’s mechanic said this could occur for several reasons, including if the engine “has been heavily modified with a larger turbo and engine tuning”.  

An assessor for the insurer concluded the damage was probably caused by the fitting of an aftermarket turbo that differed in size from the original, resulting in incorrect air-fuel ratios.  

The claimant said he chose an aftermarket turbo to keep claim costs down. He said Insurance Manufacturers of Australia’s settlement “failed to factor in the necessary calibration and tuning after the turbo was replaced, resulting in overboosting and subsequent engine damage”.  

But the Australian Financial Complaints Authority has rejected his argument.

It says the onus was on the complainant’s mechanic to ensure his quote included all work needed to repair the vehicle.

AFCA says the loss cannot be considered a “direct consequence” of the flood, and the insurer’s policy excludes losses caused by mechanical failure.  

“The replacement of the aftermarket turbo constituted a new and independent act, which broke the chain of causation. Therefore, the proximate cause of the engine failure was not the flood, but the mechanical intervention that followed.”  

Insurance Manufacturers of Australia can deny the claim but must pay $2000 compensation for “unjustifiable delays” in its claims handling.  

See the ruling here.