In December of last year, the claimant's 2017 Audi Q5 was stolen. At the time, he and his wife were inside their home arranging groceries for an upcoming trip to the beach. A simple miscommunication between the couple resulted in the husband watching their vehicle disappear as he returned outside to fetch more items.
Initially, the claim was for theft, but later it was specifically revised to address the damage sustained before the Audi was recovered.
RACQ Insurance contested the claim, emphasizing that the policyholder failed to exercise “reasonable precautions,” as required by their policy terms. They pointed out that the door had been slightly left open and the key was inside the vehicle.
The underlying policy highlighted a lack of coverage when keys are left in an “unattended” vehicle, thus not ensuring the car's security from theft or damage. Given the circumstances, the insurer argued that the theft could not have been prevented by the couple, who were inside their home at the time.
The claimant’s wife clarified her decision to park on the street; logistic disruptions caused by another car and a boat in their driveway contributed to her hasty parking choice and oversight of retrieving the key while managing groceries.
She anticipated that her husband, who was outdoors, would collect her phone and the car key, thus attributing responsibility to him.
The Australian Financial Complaints Authority (AFCA), while handling the dispute, pointed out the impracticality of the insured's claim of having visibility over the vehicle from inside the kitchen. The ruling acknowledged the common occurrence of vehicle thefts in the locality reported by the insured, highlighting a plausible distraction while handling household tasks.
In its ruling, the AFCA considered whether the couple were mindful of potential risks at the moment of the theft. As an AFCA ombudsman noted, “There is no persuasive information showing a risk of theft was at the forefront of the insureds’ minds when they left the insured vehicle unattended and unlocked the way it was.”
The ombudsman further stated, “Considering these matters, I accept the insureds’ actions can be perceived as inadvertent or, at most, negligent or careless. I do not accept they go so far as to show they deliberately or recklessly courted the risk of theft.”
This fidelity to the understanding of negligence versus deliberation resulted in a ruling that favored the couple’s coverage request.
This intriguing case echoing from Insurance News Magazine illustrates how interpretation of policy terms can vary significantly based on contextual nuances surrounding an incident, reiterating the narrow line between negligence and reckless endangerment.
