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Insurer must pay stolen vehicle claim despite keys left in car

A car theft victim will be reimbursed for their losses after winning a claims dispute against their insurer, which failed to prove the insured had been provided with the latest product disclosure statement (PDS).

The claimant’s 2018 Honda Civic was stolen in August last year after they left it parked in the driveway of a relative’s home. The vehicle was found a month later in a badly damaged state.

RAA said the complainant had failed to take “reasonable care” of the car after he left a bag in the vehicle, which contained a key fob that was used to access the car. It said the policy’s 2021 Product PDS had specific guidelines not to leave ignition keys in the car while it was unattended.

The policyholder said the insurer did not provide them with the 2021 PDS and had been relying on its 2017 PDS.

The insurer acknowledged that it did not give the complainant a physical copy of the 2021 PDS but said it provided a hyperlink to a copy of the PDS in a renewal letter from June 2 last year.

It said its internal systems showed the claimant had opened the link at least once.

But the Australian Financial Complaints Authority (AFCA) said it could not be satisfied that the complainant accessed the newer PDS.

AFCA said RAA could not confirm the hyperlink had been functional, noting that when it tested the link provided in a copy of the renewal letter, it did not work. The insurer said that this was because it was a copy of the original correspondence.

AFCA said there had been “significant changes” between the 45-page 2017 PDS and the 68-page 2021 PDS and it was unclear whether the insurer informed the policyholder of any new details.

It said that because RAA could not show that the insured was able to access the 2021 PDS, the determination should instead rely on the 2017 PDS, which the complainant admitted they had accessed.

The 2017 PDS included references to “reasonable care” and cautioned the policyholder on exclusions if they failed to “take proper precautions to prevent further loss or damage” but made no explicit references about not leaving ignition keys in unoccupied vehicles.

AFCA said that references to “reasonable care” related to a complainant “courting a danger” by failing to take measures to stop known risks rather than making a simple mistake.

It said there was “no persuasive evidence” to show that the car owner had been aware that leaving the key fob in the car would cause the theft and did not allow RAA to rely on the exclusion. 

“As I am not satisfied the insurer can show it has grounds to deny the claimed loss, the insurer should cover it,” AFCA said.

“The insurer is required to assess the insured vehicle to determine if it is repairable or a total loss.”

“It may then settle the complainant’s claim in accordance with the terms and conditions of the 2017 PDS (based on the 2022 sum insured for the vehicle).”

Click here for the ruling.