Ombudsman rejects ‘implausible’ fake crash allegation
A car owner who was accused of staging a crash will be covered for damage after the complaints authority accepted he was in a genuine accident.
The motorist told insurer IAG his BMW was hit on a roundabout in January 2024, causing it to spin out and stop on a curb.
The other driver involved stopped to exchange information and take photos, and police attended the scene, he said.
His car was insured for an agreed value of $175,000, despite him paying only $33,700 for it a few years earlier. The claim was filed just days before his policy was to renew at a lower agreed value.
IAG’s forensic investigator said the damage pattern indicated the man’s car was stationary and turned off when it was hit, and the vehicle’s data recorder showed the last recorded impact occurring in October 2023.
The insurer said the other driver refused to be interviewed, raising concerns the claim was fabricated to gain from a total loss payout.
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But the claimant engaged a forensic engineer who explained how a car’s data recorder can fall out of sync if the vehicle is not driven for an extended period.
The man also provided parking tickets from November 2023 to show his car was operational after the insurer’s alleged date of damage in October 2023.
In a dispute ruling, the Australian Financial Complaints Authority rejects the insurer’s suggestion that the vehicle was hit in 2023 and later moved to stage an accident on a busy roundabout “where several eyewitnesses may pass at any time”. It says this is a “complex and frankly implausible” scenario.
While the man would benefit from a payout, AFCA notes he initially intended to cover the car for a lower amount but increased it to $175,000 at the insurer’s insistence.
The ombudsman concludes the complainant’s expert report appeared more credible and it is likely the loss resulted from the reported accident.
“The simplest, most elegant explanation is usually the one closest to the truth,” an AFCA ombudsman said. “I am satisfied the insurer should accept and settle the claim.”
See the ruling here.