The owner of a stolen motorcycle who had his claim denied will be reimbursed for his losses after an Australian Financial Complaints Authority (AFCA) determination refuted allegations from his insurer that the claim had been false.

The complainant lodged a theft claim to IAG on June 9 last year after realising his bike was missing from his garage.

The man told the insurer that he had been trying to sell the bike for months and held a meeting with prospective buyers a week before the incident.

He claimed he observed the vehicle stored securely in the garage below his apartment block on June 6 and that it had not been used between the meeting and the theft.

Following a report from its factual investigator, referred to as Q, IAG informed the owner that it had denied the claim, saying that it “was not satisfied that a theft of the bike had taken place”.

The insurer alleged that the claimant had not acted in good faith as per section 13 of the Insurance Contracts Act 1984 (Cth), and that it was entitled to rely reduce its liability for the claim to nil.

AFCA noted that while the insurer did not specifically allege that the policyholder made a fraudulent claim, its contention was “analogous to fraud or dishonesty” and held “serious ramifications for the complainant”.

IAG argued that the man had a financial motive to make a false claim, noting that he had been unemployed for some time, relied on government payments during covid lockdowns, and was in debt.

Q’s report pointed out...

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