A policyholder will be reimbursed for storage costs incurred during an unsuccessful vehicle damage claim, after the complaints authority found his insurer was responsible for the expense.

The complainant lodged a claim with Auto & General in September 2024. He said his car was stolen and damaged, but he later admitted hitting a pole while driving drunk.  

The insurer closed the claim in October 2024 because the man failed to provide information it requested.  

The claim was reopened last February at the insured’s request, but Auto & General rejected it the following month over a failure to “comply with a condition of cover”.

After the claim denial, the insured had to pay storage and towing costs to collect his vehicle from a holding yard.  

He argued he should not be responsible for the costs because the insurer arranged for the car to be towed without notifying him of the fees.

He said the insurer’s repairer told him the vehicle would be moved from the yard after the claim was lodged, but that never happened. The insurer did not correct this information.

The claimant also said Auto & General caused him to incur additional costs by delaying its decision on his claim until March 2025.

Auto & General said its policy did not cover “any costs associated with the storage of the car before you make a claim with us or after your claim has been paid”.  

It said the onus was on the complainant to enquire about his vehicle’s location after the claim was denied in October 2024, which he had not done.  

The Australian Financial Complaints Authority says the policy outlined the insurer’s responsibility to “arrange and pay for the cost to tow the car between locations, including any necessary storage”.

The authority notes the insurer acknowledged its communication error regarding storage costs, and says it should pay for fees between September 2024 and last March.  

“The policy does not require the claim to be accepted for the cost of storage and towing to be covered,” it said.

Auto & General must also pay $1000 compensation for inconvenience caused by its poor communication.  

See the ruling here.