Case No: 349861. Determination. Page 1 of 4. Case number: 349861. 4 December 2014. 1 Overview. 1.1 Dispute. This dispute
Determination
General Insurance - Domestic Insurance - Motor Vehicle- Comprehensive - Service Service quality
Determination Case number: 349861
1
4 December 2014
Overview
1.1 Dispute This dispute follows a claim for damage sustained to the Applicants’ vehicle following its theft on or about 27 September 2013. A dispute has arisen as to the payment of the excess and compensation following delays and issues with the standard of repairs which led to the Applicants employing their preferred repairer to complete the works. A Recommendation was issued in this matter on 22 September 2014. The Recommendation was substantially in favour of the FSP. The Applicants have rejected the Recommendation.
1.1 Issues and key findings Is the offer to pay for the cost of repairs less applicable excess fair in the circumstances? The offer to pay for the cost of repairs less the applicable excess is not fair in the circumstances because: the Applicants’ vehicle was stolen on 13 September and recovered on 15 September; the FSP did not obtain relevant quotations for repairs until 2 October 2013; the repairs had not been completed as at 28 November 2013; in view of the ongoing delays and FSP’s failure to respond to the Applicants’ reasonable request, it is fair that the FSP waive its applicable excess. Should the FSP provide a lifetime guarantee for repairs? The FSP should provide a lifetime guarantee for repairs because: it was only due to the Applicants’ action that the faulty repairs were identified; the Applicants preferred repairer is a repairer authorised by the FSP to conduct repairs; it is fair that the FSP extend its lifetime guarantee on repairs to the repairs conducted by the Applicants’ repairer. Is Compensation Appropriate? Payment of compensation for non financial loss pursuant to paragraph 9.3 of the Terms of Reference is appropriate because:
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the Applicants have suffered an unusual degree of inconvenience throughout this matter;
1.2 Determination This Determination is in favour of the Applicant. The FSP is to waive the applicable excess and to offer a lifetime guarantee on the repairs conducted by the Applica nts’ repairer. The FSP is to pay the sum of $1,000 compensation for non financial loss pursuant to paragraph 9.3 of the Terms of Reference.
2 Reasons for Determination There has been a full exchange of material between the parties and each party has had the opportunity of addressing the issues that arise from the material exchanged. Following the Applicants’ rejection of the Recommendation, the Applicants provided an email in which they have essentially repeated the issues previously raised in this dispute. This Determination is based on consideration of all of the information exchanged and on what is fair in all the circumstances having regard to relevant legal principles, the terms of the policy, good industry practice, relevant industry codes and prior Determinations where relevant.
2.1 Is the FSP entitled to apply an excess to the Applicants’ claim? The FSP is not entitled to apply an excess to the Applicants’ claim The Applicants’ vehicle was stolen on 13 September 2013 and recovered on 15 September 2013. Although the FSP has not provided precise details, it would appear, based on their internal notes, that the vehicle had not been delivered to the authorised repairer until some stage after 22 October 2013. On 22 October 2013, the Applicants made enquiries as to the status of the repairs and according to the FSP’s notes, the vehicle had not arrived at the repairers. According to a file note the vehicle was in a holding yard as they had not been advised where the vehicle was to be towed. This is nearly six weeks after the FSP was notified the vehicle had been recovered. The Applicants were then advised that the repairs were on track to be completed by 12 November 2013.
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The Applicants frustration with the FSP’s delays is apparent from the emails exchanged with the FSP. On 28 November 2013, the FSP advised the Applicants that the only repairs left were to polish, tint and the stereo. At that stage, the Applicants had not been informed by the FSP as to what repairs had been performed. The Applicants informed the FSP that they intended to remove the vehicle from the repairer to CH to complete the repairs. It appears that despite the Applicants’ emails and discussions with the FSP, they were frustrated in removing the vehicle when the repairer refused to release the vehicle. The Applicants contacted the FSP on 2 December 2013, requesting an assessor inspect the vehicle at CH due to the very poor repairs completed by the previous repairer. The FSP advised the Applicants on 3 December that their assessors do not attend on site outside of the assessing centres. The Applicants subsequently provided the FSP with quotations showing extensive repairs required to the vehicle that were not identified by its preferred repairer. The FSP appears to have failed to understand the nature and seriousness of the issues identified by the Applicants. Whilst I accept that the FSP has subsequently acted reasonably in agreeing to pay the Applicants for the cost of the repairs perfo rmed by CH, I am not satisfied that the FSP has acted reasonably to that time. I believe it is fair in the circumstances that the FSP waive any applicable excess. It is my understanding that the parties have agreed that the total cost of repairs to the Applicant was $10,669.61. In the circumstances, I believe the FSP should waive its excess of $500. Is the FSP required to provide a lifetime guarantee on the repairs? The FSP maintains it is not required to provide a repair guarantee as the repairs were undertaken by the Applicants’ repairer CH. The FSP agrees it authorised the Applicants to have the repairs conducted. It did so on the basis that it would pay the Applicants for those repairs. The FSP contacted the Applicants with this offer in April 2014. I accept during a telephone conversation on 29 November 2013, the Applicants were informed the lifetime repair guarantee would be nullified on repairs not authorised by the FSP. The FSP is entitled to impose limitations on the extent of any guarantee given with respect to repairs where those repairs are conducted by persons outside of their control. Nevertheless, in this dispute it is apparent that the initial repairs were not completed correctly, nor had the damage been properly assessed. Case No: 349861
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The Applicants acted reasonably after a considerable delay in the repair process by contacting CH who is also an authorised repairer of the FSP. CH had in fact been authorised by the FSP to perform work on the Applicants’ vehicle shortly prior to it being stolen. The FSP had the opportunity of having the vehicle inspected at CH’s premises by an assessor and dealing with the issues raised by the Applicants. This opportunity was there from as early as 29 November 2013. It is possible if not likely that an assessor would have authorised CH to complete the repairs. In the circumstances, given the extensive nature of the additional repairs required, and the failure of the FSP to properly assess the faulty repairs, it is fair that the FSP provide the Applicants with a lifetime guara ntee on the repairs completed by CH. Is Compensation Appropriate? Under paragraph 9.3 of the Terms of Reference under which the Service operates, the Service is permitted to award compensation of up to $3,000 for non financial loss if there is an unusual degree or extent of physical inconvenience, time taken to resolve a situation or interference with an Applicant’s expectation of enjoyment or peace of mind. The Service takes a generally conservative approach in the awarding of compensation for non financial loss and expects an Applicant to be moderately robust and expect a normal degree of inconvenience when problems occur. In the current dispute the Applicants have attempted to resolve issues with the FSP, have made reasonable enquiries of the FSP as to progress of delays. The Applicants have been misled by the FSP (through its repairer) as to the state of its repairs to the vehicle, have had to organise for the vehicle to be removed from the repairer (and again inconvenienced during this process), have had to arrange separate quotations and ultimately pay for the cost of those repairs prior to reimbursement from the FSP. The FSP’s conduct including the conduct of its repairer and the delays involved have subjected the Applicants to an unusual degree of time taken to resolve the dispute and inconvenience. In my opinion, it is appropriate that the FSP pay compensation for non financial loss in the sum of $1,000.
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