Centrelink recipient turns written-off vehicle into $250,000 payout
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If you’ve ever had to make an insurance claim, you’ll know it can sometimes feel like you’re jumping through hoops just to get what you’re owed.
But what happens when your insurer flat-out refuses to pay, even after your car is written off?
For one Aussie, the answer was a jaw-dropping $250,000 payout—after a battle that would test anyone’s patience.
Let’s set the scene: a Centrelink recipient, whose main income was assumed to be government benefits, found himself in a David vs Goliath battle with insurance giant IAG.
The drama began when his recently purchased $65,000 BMW was left parked on a street while he and his partner enjoyed a meal out.
When they returned, the car was a write-off, the victim of a collision.
You’d think that’s what insurance is for, right? IAG rejected his claim, calling the whole scenario ‘implausible’.
They argued that the man had both ‘motive’ and ‘opportunity’ to make a dodgy claim, especially since he’d insured the car for a whopping $280,000 (later reduced to $250,000) just days after buying it for $65,000.
The insurer even pointed to his Centrelink status, suggesting he stood to gain financially from a payout.
But our determined claimant wasn’t about to let that slide. He took his case to the Australian Financial Complaints Authority (AFCA), refuting every allegation.
He explained that contrary to assumptions, he was no stranger to big money—he claimed to earn up to $40,000 a month trading stocks and cryptocurrencies.
As for the insurance value, he’d followed the insurer’s own advice, which suggested a value range between $175,000 and $325,000 for his model.
The insurer’s suspicions didn’t stop there. They questioned why he’d left the car on the street instead of parking it securely or taking it to the restaurant.
The man’s answer was refreshingly honest: he and his partner planned to have a drink, so they took an Uber. The street had no parking restrictions, so why not leave the car there?
IAG also raised issues about the man’s driving history (he was disqualified from driving at the time), a previous claim, and the fact that he didn’t call the police after discovering the damage.
They even suggested the damage was ‘malicious’ rather than accidental.
But the AFCA adjudicator wasn’t convinced by the insurer’s arguments.
A crash investigator’s report suggested the damage was likely caused by a reversing truck attempting a three-point turn on a narrow road.
The adjudicator acknowledged some inconsistencies in the man’s story but ultimately ruled that there wasn’t enough evidence to prove fraud or dishonesty.
In the end, the man was awarded the full $250,000 payout plus interest.
The insurer, for their part, said that investigations are sometimes necessary for high-value claims, but as soon as AFCA made its decision, the money was paid out.
Insurance is there for peace of mind, but it pays to read the fine print and be prepared to stand your ground if things go pear-shaped.
If you’ve ever had a claim rejected or felt unfairly treated by your insurer, you’re not alone—and there are avenues for appeal.
In other news, Insurance Australia Group (IAG) faces a class action lawsuit over claims it used a computer algorithm to inflate premiums through a practice called 'loyalty uplift.'
The lawsuit alleges that IAG misled customers about discounts, potentially resulting in them paying more for insurance instead of receiving a cheaper rate. You can read more about it here.
Have you ever had a run-in with your insurer? Did you have to fight for a payout, or did things go smoothly? Share your stories in the comments below—your experience could help another member in a similar situation!
But what happens when your insurer flat-out refuses to pay, even after your car is written off?
For one Aussie, the answer was a jaw-dropping $250,000 payout—after a battle that would test anyone’s patience.
Let’s set the scene: a Centrelink recipient, whose main income was assumed to be government benefits, found himself in a David vs Goliath battle with insurance giant IAG.
The drama began when his recently purchased $65,000 BMW was left parked on a street while he and his partner enjoyed a meal out.
When they returned, the car was a write-off, the victim of a collision.
$250,000 plus interest was awarded to a Centrelink recipient after a claim was denied over a written-off BMW. Credit: Facebook
You’d think that’s what insurance is for, right? IAG rejected his claim, calling the whole scenario ‘implausible’.
They argued that the man had both ‘motive’ and ‘opportunity’ to make a dodgy claim, especially since he’d insured the car for a whopping $280,000 (later reduced to $250,000) just days after buying it for $65,000.
The insurer even pointed to his Centrelink status, suggesting he stood to gain financially from a payout.
But our determined claimant wasn’t about to let that slide. He took his case to the Australian Financial Complaints Authority (AFCA), refuting every allegation.
He explained that contrary to assumptions, he was no stranger to big money—he claimed to earn up to $40,000 a month trading stocks and cryptocurrencies.
As for the insurance value, he’d followed the insurer’s own advice, which suggested a value range between $175,000 and $325,000 for his model.
The insurer’s suspicions didn’t stop there. They questioned why he’d left the car on the street instead of parking it securely or taking it to the restaurant.
The man’s answer was refreshingly honest: he and his partner planned to have a drink, so they took an Uber. The street had no parking restrictions, so why not leave the car there?
IAG also raised issues about the man’s driving history (he was disqualified from driving at the time), a previous claim, and the fact that he didn’t call the police after discovering the damage.
But the AFCA adjudicator wasn’t convinced by the insurer’s arguments.
A crash investigator’s report suggested the damage was likely caused by a reversing truck attempting a three-point turn on a narrow road.
The adjudicator acknowledged some inconsistencies in the man’s story but ultimately ruled that there wasn’t enough evidence to prove fraud or dishonesty.
In the end, the man was awarded the full $250,000 payout plus interest.
The insurer, for their part, said that investigations are sometimes necessary for high-value claims, but as soon as AFCA made its decision, the money was paid out.
If you’ve ever had a claim rejected or felt unfairly treated by your insurer, you’re not alone—and there are avenues for appeal.
In other news, Insurance Australia Group (IAG) faces a class action lawsuit over claims it used a computer algorithm to inflate premiums through a practice called 'loyalty uplift.'
The lawsuit alleges that IAG misled customers about discounts, potentially resulting in them paying more for insurance instead of receiving a cheaper rate. You can read more about it here.
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