A Vintage Car Owner Faces Claims Rejection After Repair Nightmare

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.

The Pontiac, originally purchased from the United States in 2014, was in need of refurbishment to restore its former glory by 2021. In December of that year, the car owner approached a repair shop, designated here as Shop N, which provided a restoration estimate of $12,000. Little did he know that this choice would lead him down a troublesome path.

By July 2022, the owner became increasingly frustrated with the lack of progress on his vehicle. In an effort to reclaim his car, he arranged for a former employee of Shop N, referred to here as Shop C, to retrieve the vehicle. However, he claimed that Shop N refused to release the car, leading him to lodge a theft report with his insurance company, SGUAS.

In a strange twist, the owner later revealed to SGUAS that the vehicle had indeed been found. He stated that Shop C had taken the car after allegedly threatening the repair shop's owner. With the car in Shop C’s possession, the owner paid $6,000 for necessary repairs, believing his vehicle was in capable hands.

Despite assurances that work was progressing smoothly, the owner’s confidence waned when he could not ascertain the storage location of his car. When he visited Shop C’s facility in March 2023, he was informed that his vehicle was unavailable, sparking another theft report when communication broke down.

As investigations unfolded, it became apparent that Shop C had stored the Pontiac in a paid location but had failed to prevent damage from corrosion and missing parts. The insurer SGUAS ultimately denied the owner’s claims, asserting the circumstances did not qualify as theft. They reasoned that since the owner had permitted both Shop N and Shop C to handle his vehicle, it could not be considered stolen.

This ruling, released by the Australian Financial Complaints Authority (AFCA), clarified that while the claim was rooted in distressing events, it did not meet the criteria for theft as defined under the insurance policy. Both repairers were found to have inadequate responses to queries regarding the car's condition, but AFCA concluded that the owner's authorization to the repairers negated the theft claim.

“It is not clear whether the damage is malicious or just a byproduct of negligence,� AFCA detailed in its findings. The report indicated that Shop C, after disassembling parts of the vehicle, exhibited an inability or unwillingness to complete the repairs, further complicating the ordeal.

The AFCA noted, “The situation is significant and distressing for the claimant,� nonetheless confirming that the terms of the insurance policy would not cover the circumstances described. Insurance experts recommend that vehicle owners conduct thorough due diligence before committing to a repair shop, ensuring clear agreements and regular updates throughout the repair process.

For classic car enthusiasts, these cases serve as a stark reminder of the complexities involved in restoration work and the critical importance of safeguarding their investments through comprehensive insurance knowledge and proactive communication with service providers.

Source: Insurance News Magazine

Published:Tuesday, 31st Dec 2024
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:

Insurance News

Clear

Why Claims Handling Scrutiny Matters for Liability Cover

09 Sep 2026: Paige Estritori

Fresh scrutiny of general insurance claims handling has again put the spotlight on how policies perform when customers need them most. While much of the public discussion often centres on household claims, the same service and documentation issues can become critical for small businesses facing a third-party injury or property damage allegation. - read more

What NSW Insurance Levy Reform Means for Business Cover

02 Sep 2026: Paige Estritori

New South Wales’ move to shift emergency services funding away from insurance premiums has put business insurance affordability back in the spotlight. For small business owners, tradies, hospitality operators and event organisers, the change is welcome in principle: levies and taxes can add noticeably to the total cost of holding cover, especially when several policies are bundled together. - read more

Why Easing Insurance Prices May Not Mean Easier Liability Cover

26 Aug 2026: Paige Estritori

Fresh commercial insurance market commentary suggests Australian businesses may be seeing more favourable conditions in some parts of the insurance market, but that does not mean liability cover has become simple, automatic or uniformly cheaper. For small business owners, tradies, contractors, venues and event organisers, the message is clear: public-facing risk still needs careful attention. - read more

Why Claims Inflation Still Matters for Public Liability Cover

19 Aug 2026: Paige Estritori

Fresh industry commentary on Australia’s commercial insurance market points to an important distinction for small businesses: easing conditions in some insurance classes do not necessarily mean liability risks are becoming cheaper or simpler to manage. Long-tail casualty lines, including public liability insurance, remain exposed to legal costs, medical expense inflation, higher settlement expectations and the time it can take for claims to fully develop. - read more

Claims Code Reform Keeps the Spotlight on Liability Cover

12 Aug 2026: Paige Estritori

Renewed attention on reforms to Australia's General Insurance Code of Practice is a useful reminder that the quality of an insurance policy is tested most clearly when a claim is made. For small businesses, sole traders, tradies and event organisers, that moment can be stressful, time-sensitive and financially significant, especially where a customer, supplier or member of the public alleges injury or property damage. - read more

Click for more Insurance News