“The insurance company was determined to evade, mislead and delay on its responsibilities on this small claim. What does that mean for large ones?” HUGH SELBY shares a cautionary tale about car insurance.

Remember being read a short cautionary tale as a child, typically illustrated with colour drawings that left nothing to our imaginations?

Remember what happened to Harriet when she played with matches? To bring back the story rhymes, the observant cats, her legacy shoes and the ashes, relive it here.

I’m sharing an adult’s cautionary tale, but free of drawings or photos or a video because your life experience is enough.

Harriet was fatally unwise to play with matches. I wonder whether there was any insurance aspect to that tale.

If so, could the survivors trust or count on those who claim to care?

It was a morning peak-hour trip in late October last year when two cars were damaged, but still drivable. One of them strayed into the wrong lane. The drivers exchanged details and went their ways, but not before one of them took photos on his phone. 

Driver Boris (pseudonym) was in a late-model, leased small SUV with comprehensive insurance. He didn’t say anything about his insurance at the accident site.

Driver Jason (pseudonym) was in a 20-year-old coupe with third-party insurance, so he wasn’t covered for the damage to his car.

Boris went missing. All attempts to contact him failed. Jason resigned himself to paying to repair the damage on his car. He got a couple of estimates.

Months went by. Out of the blue, in mid-April, he was contacted by Boris’s insurer who wanted his insurance details so that his insurer could pay for the damage to Boris’ SUV.

“Hold on”, said Jason, “Boris caused that accident, not me. He never mentioned his insurance”.

“Prove it”, said the big insurer. So Jason did. He promptly sent them the text messages, his photos, and a detailed explanation. 

The short version is that Jason was in the right-hand lane and had no reason to move from it. Boris veered into that lane from the left, damaging the right side of his SUV and the passenger side of Jason’s coupe.

Cut and dried and very simple to follow from the photos.

Did the insurer admit liability and promptly settle? Only in your dreams.

They came back and said that liability couldn’t be determined, so how about each party pays its own costs?

“Two-ing and fro-ing” didn’t change the result, but it did irritate Jason. First, he’d had the experience of lying Boris and now he was dealing with an evasive insurer.

Taking the complaint to AFCA

So Jason took it to the Australian Financial Complaints Authority (AFCA). You can find out all about them at their website here. 

This is a cost-free way to try and get some insurer nonsense reversed. Mind you, a complainant needs, like Jason, to be tenacious.

It doesn’t help to be told, wrongly, that you need dash cam footage if you don’t have independent witnesses.

Part of the AFCA process was obtaining all the insurer’s documentation and sharing it with Jason.

That happened after the insurer still claimed that liability couldn’t be determined and each party should wear its own costs.

And, lo, upon an inspection of the insurer files an internal memo was found that relevantly says, “damage to (Boris’ car) suggests that (Jason’s car) was likely in (Boris’) blind spot at time of lane change. Based on damage consistency and positioning, liability likely rests with (Boris’ car) not 100%”.

As they say in the movies, “Oops”. It was Jason who found it, not the AFCA people. That’s a bit of a worry.

Of course, that’s not the only worry. Why didn’t the insurer pay up when its staffer gave clear advice? Remember that in civil claims the standard of proof is balance of probabilities, or over 50%, not 100% or near it.

Embarrassingly caught out, the insurer made a paltry offer. Jason had offered to take his coupe to a panel repairer of their choice, but they weren’t interested.

Jason wasn’t interested in having any more dealings with them and accepted their offer. Did they pay promptly? They did not. He had to follow up by email, phone and email again. Then they paid – this week.

As I said in opening, it’s a cautionary tale. This means you want to know the name of the insurer don’t you? Because you wouldn’t want to be treated in this way.

What with the insurers advertising under various brands it can be hard to find out what entity is taking your premiums and looking for excuses not to pay out.

This one has recently had prominent advertising on motorways between Canberra and Sydney. One message claims that in Australia it’s trusted by 4.5 million customers. Another says: “Care you can count on”. 

It’s up to you whether and on what terms you trust them.

Me, I don’t trust Allianz – not at all. They were determined to evade, mislead and delay on their responsibilities on this small claim. What does that mean for large ones?

As we know, “it’s from little things that big things happen”– for better or for worse.

Former barrister Hugh Selby is the CityNews legal affairs columnist. His podcast series, “Advocacy in court – preparation and performance”  has a new Episode 21 (published on August 11).  The podcast is available free on the best-known podcast sites.

News all day, every day at CityNewsQBN.com.au.