A Vintage Car Owner Faces Claims Rejection After Repair Nightmare

2

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Pontiac, originally purchased from the United States in 2014, was in need of refurbishment to restore its former glory by 2021. In December of that year, the car owner approached a repair shop, designated here as Shop N, which provided a restoration estimate of $12,000. Little did he know that this choice would lead him down a troublesome path.

By July 2022, the owner became increasingly frustrated with the lack of progress on his vehicle. In an effort to reclaim his car, he arranged for a former employee of Shop N, referred to here as Shop C, to retrieve the vehicle. However, he claimed that Shop N refused to release the car, leading him to lodge a theft report with his insurance company, SGUAS.

In a strange twist, the owner later revealed to SGUAS that the vehicle had indeed been found. He stated that Shop C had taken the car after allegedly threatening the repair shop's owner. With the car in Shop C’s possession, the owner paid $6,000 for necessary repairs, believing his vehicle was in capable hands.

Despite assurances that work was progressing smoothly, the owner’s confidence waned when he could not ascertain the storage location of his car. When he visited Shop C’s facility in March 2023, he was informed that his vehicle was unavailable, sparking another theft report when communication broke down.

As investigations unfolded, it became apparent that Shop C had stored the Pontiac in a paid location but had failed to prevent damage from corrosion and missing parts. The insurer SGUAS ultimately denied the owner’s claims, asserting the circumstances did not qualify as theft. They reasoned that since the owner had permitted both Shop N and Shop C to handle his vehicle, it could not be considered stolen.

This ruling, released by the Australian Financial Complaints Authority (AFCA), clarified that while the claim was rooted in distressing events, it did not meet the criteria for theft as defined under the insurance policy. Both repairers were found to have inadequate responses to queries regarding the car's condition, but AFCA concluded that the owner's authorization to the repairers negated the theft claim.

“It is not clear whether the damage is malicious or just a byproduct of negligence,” AFCA detailed in its findings. The report indicated that Shop C, after disassembling parts of the vehicle, exhibited an inability or unwillingness to complete the repairs, further complicating the ordeal.

The AFCA noted, “The situation is significant and distressing for the claimant,” nonetheless confirming that the terms of the insurance policy would not cover the circumstances described. Insurance experts recommend that vehicle owners conduct thorough due diligence before committing to a repair shop, ensuring clear agreements and regular updates throughout the repair process.

For classic car enthusiasts, these cases serve as a stark reminder of the complexities involved in restoration work and the critical importance of safeguarding their investments through comprehensive insurance knowledge and proactive communication with service providers.

Source: Insurance News Magazine

Published:Tuesday, 31st Dec 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Urgent Call for Enhanced Farm Safety Amid Rising Fatalities

29 Oct 2025: Paige Estritori

In 2024, Australian agriculture faced a significant safety crisis, recording 72 farm-related fatalities-the highest in over two decades. This alarming statistic underscores the urgent need for enhanced safety protocols and awareness within the farming community. - read more

Soaring Insurance Costs Challenge Australian Farmers

29 Oct 2025: Paige Estritori

Australian farmers are confronting a significant surge in insurance premiums, a trend largely attributed to the increasing frequency and severity of extreme weather events. Over the past few years, many farmers have reported that their insurance bills have more than doubled, with annual premiums exceeding $100,000. - read more

Revolutionising Crop Insurance with Satellite Technology

29 Oct 2025: Paige Estritori

In a significant advancement for Australian agriculture, Insurance Facilitators (IF), a family-owned underwriting agency, has introduced a data-driven crop insurance solution leveraging satellite technology. This innovative approach aims to address longstanding challenges in the industry, including premium leakage and risk accumulation, by providing more accurate and efficient risk assessments. - read more

WFI and AgCarE Join Forces to Reward Sustainable Farming Practices

21 Oct 2025: Paige Estritori

In a significant move towards promoting sustainable agriculture, WFI Insurance has partnered with AgCarE, a certification program developed by AgForce, to offer premium reductions to farmers who achieve AgCarE certification. This collaboration aims to enhance financial, environmental, and social outcomes for Australian farmers and rural communities. - read more

Rising Insurance Costs Challenge Australian Farmers as Extreme Weather Intensifies

21 Oct 2025: Paige Estritori

Australian farmers are confronting a significant surge in insurance premiums, a trend largely attributed to the increasing frequency and severity of extreme weather events. Over the past few years, many farmers have reported that their insurance bills have more than doubled, with annual premiums exceeding $100,000. - read more

Diversifying Small Farms Open New Avenues for Insurance Brokers

21 Oct 2025: Paige Estritori

The landscape of Australian agriculture is evolving as small commercial farms increasingly diversify their operations to enhance income and sustainability. This shift presents both challenges and opportunities for insurance brokers, as new ventures introduce complex risk management needs. - read more

Click for more Insurance News