The Australian Financial Complaints Authority (AFCA) has decided against a man's claim for a car insurance payout, which he pursued following a dispute with his ex-wife.
The issue arose when the man's Toyota Landcruiser was involved in an accident in April, prompting him to file for a cash settlement of $55,950.
However, the ex-wife, who held the insurance policy, later blocked his access to the payout.
Although the man argued for entitlement to the cash, citing his status as the car's registered owner and premium payer, AFCA's ruling hinged on the policyholder's rights. The insurer, IAG, noted its obligation to follow the policyholder's instructions unless informed otherwise. AFCA sided with IAG's decision to uphold the ex-wife's directive.
AFCA acknowledged the man's frustrations but highlighted that the ex-wife also likely had an interest in the vehicle, thereby justifying her position as the lead policyholder in this context. While acknowledging the car had been scrapped, resulting in an irrevocable loss, AFCA concluded it would be inequitable to override the policyholder's command.
Despite this outcome, AFCA reprimanded IAG for causing additional stress to the man due to its failure to ascertain the appropriate recipient of the settlement at an earlier stage. The authority ordered IAG to compensate the man $1,500 for the inconvenience and stress endured throughout the claims process.
For policyholders, this case underscores the significance of clear communication and understanding of insurance policy terms, particularly in circumstances involving shared asset ownership. It highlights the importance of ensuring agreement on financial transactions when multiple parties are involved.
Looking ahead, it is crucial for insurers and customers alike to maintain transparency within insurance agreements, noting potential complications in shared asset arrangements. The case also serves as a reminder that even when one party manages policy premiums, the listed policyholder retains predominant authority in claims decisions unless disputes are preemptively resolved in writing.
Published:Friday, 22nd Aug 2025 Source: Paige Estritori
The Australian Financial Complaints Authority (AFCA) has decided against a man's claim for a car insurance payout, which he pursued following a dispute with his ex-wife. The issue arose when the man's Toyota Landcruiser was involved in an accident in April, prompting him to file for a cash settlement of $55,950. However, the ex-wife, who held the insurance policy, later blocked his access to the payout. - read more
The Australian Prudential Regulation Authority (APRA) has highlighted the ongoing challenges of home insurance affordability, emphasizing that the issue remains complex despite a recent moderation in reinsurance costs. APRA Chair John Lonsdale noted that multiple factors contribute to this difficulty, not solely reinsurance expenses. APRA is actively engaging with insurers, government agencies, and the private sector to address these affordability issues. - read more
The Australian Securities and Investments Commission (ASIC) has issued a call to action for life insurance companies, urging them to enhance their product offerings and sales processes. While acknowledging some progress since the Hayne Royal Commission, ASIC highlights ongoing issues within the industry. The regulator emphasized the importance of centering strategies around customer needs, particularly as companies aim to expand direct-to-consumer sales. - read more
As a tradesperson running a small business, you face a unique set of risks every day. From accidents on the job site to damage to your expensive equipment, the challenges are numerous and varied. - read more
Running a trade business in Australia comes with its own set of unique challenges and risks. Whether you're an electrician, plumber, builder, or any other type of tradesperson, protecting your livelihood is crucial. - read more
In Australia, tradies are the backbone of many local communities, providing essential services in fields such as construction, plumbing, electrical work, and more. These skilled professionals often operate their own businesses or work as contractors, making financial stability paramount. - read more
Dictionary
Whole Life Insurance
noun
A type of life insurance that provides coverage for the insured's entire lifetime, with a savings component that builds cash value.
