Liability Insurance Australia :: News
SHARE

Share this news item!

AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute

AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute

AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

An applicant's attempt to claim insurance coverage after the theft of an engine designated for his 1993 Nissan Skyline has been denied.
Despite holding a comprehensive motor policy with IAG, the insured's claim was rejected after multiple engines were stolen in a brazen ram-raid at his vehicle repairer's workshop in November 2023, prompting an appeal to the Australian Financial Complaints Authority (AFCA).

The crux of the AFCA's ruling rested on the lack of evidence indicating the claimant's ownership of the engine, thereby negating any financial loss acknowledged under the policy. According to an AFCA ombudsman, even if ownership was established, the engine's status-intended but not installed-did not align with the policy’s definitions of 'vehicle' or 'modifications.'

Furthermore, the complainant had not opted for an additional policy benefit that could extend the cover to spare parts awaiting assembly into the insured vehicle. As a result, the claim for engine theft remains outside the current policy's provisions.

The insured also sought assistance from IAG to recover costs from the repairer, a request AFCA deemed inappropriate, emphasizing that issues pertaining to the repairer fell outside the scope of his insurance contract. This path remains a private matter between the claimant and the repairer involved.

This case highlights the critical importance for policyholders to thoroughly understand the intricacies and limitations of their insurance policies, particularly regarding coverage for vehicle components not yet integrated into the car. It demonstrates the necessity for explicit policy terms and the potential need for additional cover options to protect significant investments like spare parts.

The decision may prompt individual insurers and the wider insurance market to reassess coverage options related to spare parts and modifications to align with consumer expectations and reduce disputes. Policyholders are advised to consult their insurers to ensure adequate coverage, especially when dealing with valuable customizations or restorations. This incident serves as a valuable reminder to scrutinize insurance policies closely and engage with insurers proactively to clarify available coverage options.

Published:Sunday, 4th May 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Rate this article

Sign in with Google to rate

0 Comments

No comments yet. Be the first to share your thoughts.

Insurance News

Claims Handling Scrutiny Offers Income Protection Lessons
Claims Handling Scrutiny Offers Income Protection Lessons
05 Aug 2026: Paige Estritori
Recent industry attention on insurance claims handling has put a practical issue back in front of Australian households: a policy is only as valuable as the support it provides when a claim is made. For income protection insurance, that moment often arrives during illness, injury, stress and reduced cash flow, so clear communication and timely assessment matter enormously. - read more
Life Insurer Results Point to a More Disciplined Cover Market
Life Insurer Results Point to a More Disciplined Cover Market
05 Aug 2026: Paige Estritori
The latest life insurance performance trends reported across the Australian market suggest a sector that is more stable than it was during the height of recent claims volatility, but still highly disciplined on pricing, product design and risk selection. For employers, CFOs and company directors, that matters because the cost and availability of corporate life insurance are shaped by the same claims experience, capital settings and sustainability pressures affecting insurers nationally. - read more
Why Insurer Resilience Now Matters More for Business Protection
Why Insurer Resilience Now Matters More for Business Protection
05 Aug 2026: Paige Estritori
Recent industry attention on APRA’s operational risk standard, CPS 230, is a timely reminder that life insurance is not only about premiums, policy definitions and benefit amounts. For business owners, it is also about whether the insurer has the systems, service providers and continuity planning needed to perform when a claim becomes urgent. - read more
What the Genetic Testing Shift Could Mean for Key Person Insurance
What the Genetic Testing Shift Could Mean for Key Person Insurance
05 Aug 2026: Paige Estritori
Australia’s life insurance sector is moving closer to a major change in how genetic information is treated during underwriting. The Federal Government has been progressing a legal ban on the use of adverse genetic test results in life insurance assessments, replacing the industry’s current self-regulated approach with stronger consumer protections. - read more
Why Advice Reform Matters for Businesses Relying on Key Person Cover
Why Advice Reform Matters for Businesses Relying on Key Person Cover
05 Aug 2026: Paige Estritori
Australia’s ongoing financial advice reform agenda is again putting life insurance access under the spotlight. Recent industry reporting has focused on whether changes to advice rules can make it easier for consumers and business owners to receive practical guidance without adding unnecessary cost or complexity. - read more
Click for more Insurance News


Business Insurance Articles

Is Liability Insurance Mandatory in Australia?
Is Liability Insurance Mandatory in Australia?
Liability insurance is not automatically mandatory for every Australian business, but it can be required by law, licence conditions, contracts, leases, tenders, professional rules or event permits. This guide explains when cover may be compulsory and how to check your obligations. - read more
Common Myths About Public Liability Insurance Debunked
Common Myths About Public Liability Insurance Debunked
Today, we're diving into the world of public liability insurance, a crucial topic for anyone running a small business or working as a self-employed professional in Australia. - read more
The Cost of Safety: How Much Public Liability Insurance Does Your Australian Business Need?
The Cost of Safety: How Much Public Liability Insurance Does Your Australian Business Need?
As a business operating in Australia, understanding the ins and outs of public liability insurance is not just recommended, it's essential. This type of insurance serves as a safeguard, protecting your business against the financial repercussions of lawsuits and claims arising from third-party injuries or property damage due to your business operations. In a world where one unintended mishap can lead to costly legal battles, public liability insurance stands as your first line of defense. - read more
Q&A: Common Questions Australian Business Owners Have About Public Liability Insurance
Q&A: Common Questions Australian Business Owners Have About Public Liability Insurance
Public liability insurance is a crucial aspect of managing risk for businesses in Australia. This type of insurance covers costs associated with claims made against a business for property damage or personal injury caused during business operations. - read more
How Public Liability Insurance Can Save Your Business During a Crisis
How Public Liability Insurance Can Save Your Business During a Crisis
Public liability insurance is designed to protect your business from financial loss if you are found liable for causing injury or property damage to a third party. This type of insurance covers legal costs and any compensation claims that might arise from accidents or incidents involving your business operations. - read more


Start Here !

Start here!

Cover Amount:
Postcode:
All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.

Knowledgebase
Insurance Claim:
Notification to an insurance company requesting payment of an amount due under the terms of the policy.



Quick Links: | Liability Insurance Australia | Public Liability Insurance | Professional Indemnity Insurance | Business Liability Cover | Small Business Liability Insurance | Liability Insurance For Trades | Liability Insurance Quote | Corporate Liability Insurance | Liability Insurance For Professionals | Best Liability Insurance Australia
| HOME | RATES | CALCULATORS | NEWS | ARTICLES | ABOUT | CONTACT | PRIVACY | BROKERS | AFFILIATES | SITEMAP |
This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised Financial Services Representative of Unique Group Broker Services Pty Ltd, Australian Financial Services License 509434. Visit the ASIC website for additional licensing information.
powered by Financial Services Online | Copyright Clark Family Pty Ltd A.C.N. 010 281 008 - all rights reserved
IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.