IAG can restore a Porsche that was damaged in a lithium-ion battery fire, despite the owner’s protests it is unrepairable due to chemical contamination.

The insurer accepted the owner’s damage claim in July 2024 and determined the car could be repaired and professionally cleaned.  

IAG said the cost of this, in combination with the car’s salvage value, fell well below the vehicle’s agreed value of $324,841.

It noted that for the car to be considered a statutory write-off, the repair costs would need to exceed $91,850.

The claimant – a mother of young children who have respiratory issues – argued the insurer’s repairers could not safely decontaminate the car.

She also raised concerns about ongoing mechanical risks and the insurer’s handling of her claim, including communication issues, delays and the conduct of assessors.

The woman provided repair estimates from two assessors, one of which was $137,832 – a $98,670 difference from the insurer’s assessment of $39,162.  

In a dispute ruling, the Australian Financial Complaints Authority says it is “not persuaded the complainant’s quotes establish the vehicle is unsafe or uneconomical to repair”.

The quotes do not “establish a link between the repairs and fire damage, and do not provide persuasive evidence of incident-related damage”.

However, it acknowledges further testing will be needed to ensure the car is safe, which IAG has committed to.  

“Should the insurer reconsider its previous position and decide to treat the vehicle as a total loss, it may resolve the claim in this way,” AFCA said.

“However, if the insurer does not declare the vehicle a total loss, it must conduct further testing after repairs to ensure it is safe and fit for use.”

AFCA says the insurer’s claim handling was mostly reasonable and its offer of $1000 compensation is fair.  

See the ruling here.