Bodyshops might want to give customers a gentle nudge — read your policy, especially at renewal.
A recent ruling by the Australian Financial Complaints Authority highlights how easily cover can change, even when premiums are going up.
In this case, a policyholder’s agreed value dropped from $43,990 to $29,100 at renewal — but her premium still increased. When the car was written off, she expected the higher payout and took the dispute to AFCA.
The catch? The change had been disclosed. The complainant argued the reduced agreed value wasn’t obvious, saying it appeared later in the renewal documents rather than front and centre. She also questioned how the premium could rise while the cover dropped, and said the outcome left her short on her car loan and under significant stress.
But AFCA sided with the insurer, Suncorp. While it accepted a reasonable person might not expect such a sharp drop in value, it found the new agreed value was clearly shown in the renewal documents — including a comparison with the previous year.
AFCA also found the insurer had provided enough information to explain the premium increase, noting pricing is based on a range of commercial factors and doesn’t have to move in line with the level of cover.
Crucially, it reinforced that policies are renewed annually and insurers are not obliged to maintain the same agreed value year to year.
For shops, it’s worth flagging to customers, particularly those with finance owing on vehicles, that their cover may not be what they think it is.