The Insurance and Financial Services Ombudsman has upheld an insurance company’s rejection of an insurance claim. The complainant lost $35,000 because of their mistake.

A father had third party, fire and theft insurance on his motorhome. When the father passed away, the son inherited the motorhome and listed it for sale on Trade Me at a price of $35,000.

A person bought the motorhome from Trade Me and sent the son a screenshot of an online payment for $35,000. The motorhome was collected that same day, but the payment did not come through. The son realised the screenshot was a fake and the payment had never been made.

The son made a claim to the father’s insurance company. However, the claim was rejected because the insurance policy was in the father’s name, rather than the son’s. The insurance company also declined the claim because the loss was not from the motorhome itself, but from the proceeds of sale.

The son raised a complaint with the Ombudsman, who upheld the insurance company’s decision. The Office decided that the son had voluntarily given the motorhome to the buyer, and so it could not have been stolen. This meant that the loss could not have resulted from theft and was therefore not covered by the father’s insurance policy.

This case highlights the risks of selling online and the importance for consumers to protect their assets. If you believe that you have been treated unfairly or are confused about your rights as a consumer, it pays to seek advice from a professional with experience in the area.


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Alan Knowsley and Hunter Flanagan-Connors