An insurer must make a second $47,000 payout after it put a motor policyholder’s claim settlement into the inaccessible bank account of a liquidated company.

After the insured’s car was crashed into a home in June 2022, Auto & General settled the claim for $101,508, paying $54,084 to the business that financed the vehicle.  

The remainder was paid into a bank account belonging to a company that had been paying the policy premiums.

In May 2023, the claimant told Auto & General he could not access the cash because the premium-paying company had been liquidated.  

Auto & General said it sent a letter to the claimant detailing where the payment would be made, and the man raised no issues. It said it attempted to recall the funds when made aware of the problem but was unsuccessful.

The insurer argued it should not have to pay the sum again, because the account had been paying the premiums and was listed on its system.  

It also suggested the claimant was not the written-off vehicle’s registered owner and he breached policy requirements on customer disclosure and his duty not to make a misrepresentation.  

But in a dispute ruling, the Australian Financial Complaints Authority says the insurer should pay the settlement to the listed policyholder.  

It says there is no evidence the complainant asked for the sum to be paid to the company account.

“Through no fault of the complainant, the insurer deposited the settlement proceeds into an account that was not the complainant’s account,” AFCA said. “Therefore, the complainant has not been paid. It is fair that the insurer settles the claim in accordance with the terms of the policy.”  

AFCA also finds the complainant owned the vehicle, which was registered in his name and was in his possession.  

See the ruling here.