Farm Insurance NZ
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
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