An insurer that arranged a hire car after accepting a policyholder’s collision claim does not have to pay for damage to the rented vehicle in a second accident, the industry ombudsman has ruled.

Allianz did not mislead the policyholder into believing his comprehensive motor cover extended to the hire car, the Australian Financial Complaints Authority says.

The driver – who was not at fault in the first crash – was billed by the rental company for repairs after the second accident.

He said he believed Allianz would cover the hire car, and alleged that misleading verbal advice and a failure to warn him of material risks caused him to suffer a financial loss.

But AFCA says the insurer told the man when arranging the rental vehicle that additional costs, including insurance excesses, were the driver’s responsibility. It had directed him to read the rental agreement. This document showed the complainant agreed to a clause stating he understood he would pay for any applicable “loss damage liability”.

An AFCA ombudsman added: “Further, I note the insurer had no obligation to advise the complainant on hire car insurance or offer him options on this, as it cannot provide personal advice on the complainant’s insurance needs.

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“It was the complainant’s responsibility to ensure he obtained cover if he felt this was required.”

The policyholder pointed to a claim note in which the insurer, responding to him asking if he needed to pay anything for the hire car, said: “No, as you are [not at fault], we cover hire car costs.”

But AFCA says that the insurer “subsequently clarified during the same conversation that the complainant was likely liable for the repair cost.

“This is also confirmed in the audio recording provided of the call.”

AFCA says that because those discussions took place after the hire car accident, they could not have influenced his decision to accept the rental vehicle.

The ombudsman has rejected the man’s bid for compensation, rejecting his assertion that the insurer mishandled the matter. 

See the full ruling here.