A driver has lost a dispute over her excess after she exceeded the kilometre limit under a pay as you drive policy.

The driver lodged a claim on September 17 last year for crash damage that occurred on May 28. She was told by Open Insurance the excess would be $1700.

However, in November she was told she had exceeded the pay as you drive (PAYD) limit and a further $1000 excess would apply.

The woman argued Open Insurance had assumed an odometer reading at the time of the crash and did not request a reading until nearly two months after she lodged her claim.

She said the policy did not say she was required to give the odometer reading at the time of the incident and if she had known this, she would have taken a photo of it then.

But the Australian Financial Complaints Authority says the policy is clear on when the PAYD additional excess applies.

The insurer provided call recordings, including from three days after the crash when the woman sought to increase the PAYD kilometre limit and told the insurer her odometer reading was 181,062km.

Under the policy, the additional excess would apply if the odometer was above 171,213km at the time of the crash.

The ombudsman notes that although the product disclosure statement says the claimant is responsible for providing an accurate odometer reading when lodging the claim, it would be good industry practice for the insurer to request the reading.

Although Open initially said the excess would be $1700, AFCA’s approach when an insurer provides incorrect or misleading information “is not to make it come true”. It is fair for the insurer to apply the $1000 additional excess, the authority says.

Read the determination here.