Liability Insurance Australia :: News

Share this news item!

AFCA Rules Against Engine Theft Coverage in Motor Policy Dispute

⚠️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
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

WFI Insurance and Rural Aid Join Forces to Assist Farmers in Crisis

02 Feb 2026: Paige Estritori

In a significant move to bolster support for Australia's agricultural sector, WFI Insurance has announced a formal partnership with Rural Aid, a leading rural relief charity. This collaboration is set to provide much-needed assistance to farmers and rural communities affected by recent natural disasters, including the devastating bushfires in Victoria and severe weather events in Queensland. - read more

Elders Insurance Warns Farmers of Escalating Summer Storm Threats

02 Feb 2026: Paige Estritori

As the Australian summer approaches, Elders Insurance is calling on farmers to brace for an anticipated increase in storm-related damages. Recent claims data reveals a concerning trend, with summer months accounting for nearly half of all storm-related farm insurance property claims over the past two years. - read more

AFCA Observes Significant Increase in General Insurance Complaints

01 Feb 2026: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has reported a 17% increase in general insurance complaints for the year ending June 30, 2025, totalling 34,231 cases. This uptick is primarily attributed to issues surrounding add-on covers and delays in motor vehicle insurance claims. - read more

APRA's Findings: Stability in PI Claims and Decreasing Premiums

01 Feb 2026: Paige Estritori

The Australian Prudential Regulation Authority (APRA) has released its latest National Claims and Policies Database, providing valuable insights into the professional indemnity (PI) insurance sector for the 2022 underwriting year. The data indicates that PI claims payments for non-facility business remained relatively stable at $1.111 billion, a slight increase from $1.109 billion in the previous year. - read more

Upcover's New Insurance Solutions for Australian Nurses

01 Feb 2026: Paige Estritori

Sydney-based insurtech company Upcover has unveiled a new professional indemnity and public liability insurance product tailored specifically for nurses across Australia. This initiative aims to provide comprehensive coverage that meets the unique needs of nursing professionals, including nurse practitioners, in-patient nurses, doulas, and nursing students. - read more

Click for more Insurance News

Business Insurance Articles

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

Why Every Business Needs Public Liability Insurance

Welcome to our comprehensive guide on public liability insurance. If you run a business, you've probably heard this term thrown around quite often. But what exactly is public liability insurance? - read more

Insurance Essentials: Protecting Your Small Business with Public Liability Coverage

Running a small business in Australia comes with its own set of challenges and risks. One crucial aspect that should never be overlooked is insurance, particularly public liability insurance. The reason is simple: it offers essential protection against claims of property damage or personal injury caused by your business operations. - read more

Key Benefits of Comparing Public Liability Insurance Rates for Australian Businesses

As an Australian business owner, you face numerous financial risks daily. Accidents can happen at any time, whether it's a slip and fall on your premises or damage caused by your products or services. These incidents can lead to costly legal actions that may put significant strain on your business finances. - read more

Proven Strategies for Slashing Your Business Liability Insurance Costs

Welcome to our comprehensive guide on public liability insurance, an essential safeguard for businesses across Australia. Navigating the complexities of liability insurance can be a daunting task for many business owners, but it’s a critical component of your business protection plan. If incidents such as accidents or property damage occur, liability insurance is the barrier that stands between your business and financial calamity. - read more

Start Here !

Knowledgebase

No-Fault Insurance:
A type of car insurance where your insurer pays for your damages regardless of who is at fault in an accident.

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.

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.