A dispute service said an insurance company was wrong to deny the claim of a man who scraped another vehicle after two drinks. Photo: ROBERT MICHAEL / DPA via AFP
A driver who scraped another car with his vehicle while leaving a bar carpark has had an insurer's decision to turn down his claim on the basis he had been drinking overturned.
The man was at a restaurant bar in June last year, dispute service Financial Services Complaints Ltd (FSCL) said, when he drank two handles of beer over an hour-and-a-quarter without food.
When he left, he misjudged the turn out of the carpark and scraped another vehicle.
He exchanged insurance details with the driver of the other car, dropped a friend home and then went home himself.
The car was a company vehicle and his employer lodged an insurance claim. The man said he had two beers before the incident. The insurer declined the claim and argued he was under the influence.
The man complained to FSCL, an external service, saying he would never drive if he was over the limit and the decision to reject the claim was unfair.
There had been no breath test or police involvement to prove he was impaired, and no one had raised concerns about him being too intoxicated to drive.
But the insurer said he had enough to impair his judgement. He had been drinking on an empty stomach and online breath alcohol calculators suggested he might be close to or over the legal limit.
The insurer said a third transaction on his bank statement suggested he might have had more to drink.
To turn a claim down on the basis of alcohol, FSCL said an insurer had to have evidence the driver was impaired.
"We noted that while online BAC calculators can provide an estimate, they do not offer definitive proof of impairment. They also do not account for individual tolerance levels or confirm how alcohol affects a specific person. The insurer's conclusion that [the man] drank more than he claimed was based on suspicion rather than solid evidence. Additionally, the accident itself - a minor scrape while reversing in the dark - was not, on its own, proof of intoxication.
"We found that the insurer did not have reasonable grounds to decline the claim."
FSCL said it was required to pay the claim, even though the insurer said it was concerned that it was a commercial policy and there were dangers associated with drivers operating commercial vehicles after drinking.
"We acknowledged the concern but noted that if an insurer wants to exclude claims where any alcohol has been consumed, this must be clearly stated in the policy terms."
Government advisory site Consumer Protection says people who have drunk alcohol in the hours before an accident must disclose that, even if they were under the legal limit.
If they do not, they can have their claims denied.
FSCL ombudsman Susan Taylor said insurers might ask whether a driver had been drinking or taking drugs whenever a claim was lodged.
Susan Taylor, the Financial Ombudsman and CEO at FSCL Photo: FSCL
"In contracts of insurance, both parties to the insurance contract have a duty of good faith, and this continues throughout the life of the contract. When it comes to making a claim, the good faith duty requires an insured to act honestly. This includes answering the questions on the claim form accurately. If an insured person tells a deliberate lie when making a claim, this breaches their duty of good faith, and this may allow the insurer to decline the claim," she said.
But the burden of proof was on the insurer to establish the driver was under the influence, she said.
"There can be difficulties for an insurer in establishing this without a breath or blood alcohol test. Though, there may be occasions where there is sufficient other evidence, even without a breath or blood alcohol test, for an insurer to reasonably conclude the driver was under the influence. With insurance claims, honesty is the best policy."
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