A company has failed to overturn insurer deductions including unpaid premium after its vehicle was stolen six days into an annual policy.

The business had comprehensive cover with Suncorp, insuring the vehicle for $104,900. It lodged a claim on January 29.

The car was not found and the insurer agreed to pay the amount covered, minus deductions including excesses, unpaid premium, input tax credit entitlements and the loan balance to a credit provider.

But the insured took its case to the Australian Financial Complaints Authority, arguing the deductions were “unjust and unauthorised” and the full amount should be paid. It also said its premium had been increased unreasonably at the last renewal.

The product disclosure statement said a standard excess of $1325 and flexi-premiums excess of $250 applied to all claims, but the insured said it should not have to pay because the claim arose from “unavoidable circumstances”.

The excess could be waived if another driver was “entirely at fault” and their details provided, but AFCA says this is not the case and the insurer is entitled to deduct it.

The PDS also said that when the insurer paid for a total loss it would deduct any unpaid premium.

“The complainant says it should not have to pay for an entire year’s cover when its car was stolen after only six days,” AFCA says. “It says that after the car was stolen, there was nothing for the policy to cover, and it is unreasonable for the insurer to charge a premium without providing cover.”

But the authority says that while the premium was to be paid in monthly instalments, the policy was for a year’s cover.

“The policy terms do not entitle the complainant to a full or partial refund of the premium if the car became a total loss, regardless of whether this occurs on the first or last day of the period of insurance.”

AFCA says the insurer is entitled to deduct the unpaid premium, along with the input tax credit entitlement and loan balance, which will be paid to the credit provider.

At the last renewal the premium increased from $6723 to $9545, which the complainant argued was “unreasonable”.

But the ombudsman says premium details were outlined in a renewal notice sent on December 13 last year, which the company’s director said he did not have time to read, having been overseas at the time.

“AFCA cannot award any remedy with respect to the premium increase.”

See the full ruling here.

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