How stolen car insurance claims can increase premiums
Some drivers are paying the price when it comes to their insurance because they are not at fault if their vehicle is stolen.
Insurers are being called out by some Australian auto owners for increasing policy prices and denying coverage to victims amid a surge in vehicle thefts.
One Stolen Cars Melbourne Facebook user claimed that their wife’s insurance premium increased significantly after he added himself as a nominated driver – having filed a stolen car claim on a separate policy earlier this year.
“Has anyone else been stung by insurance? “I went through the online screen to add myself as a ‘nominated driver’ on my wife’s Mitsubishi Outlander insurance policy,” they explained.
When the form asked if they’d made any claims in the last three years, the Facebook user ticked yes following the theft of their Holden Commodore SSV VF in September 2024.
“My wife’s car insurance premium has increased by over $500 since my car was stolen, and I occasionally drive hers.” If I leave my details off the quote, it goes back to ‘normal’ – around $1000 for comprehensive insurance.”
Many commenters have had similar experiences with certain insurers, and their experiences are not isolated.
One Facebook user said, “[My] car got stolen, I bought another car [and] went to get insurance and [the insurer] tried to charge me $7000, so I switched to a different insurance company… Having my partner on the policy would cost me $1100 more a year.”
Several insurers refused to cover them after a second car theft claim, according to another commenter.
“Some companies won’t even insure me anymore since I already had an “at fault” claim, and since my car was stolen was my second, being under 25, it screws you.” As a result, I am now paying $3K+ a year for my vehicle insurance.
If my car is stolen, why does my insurance go up?
In the event of a vehicle theft, filing an insurance claim can lead to increased insurance rates, regardless of whether the policy holder or a nominated driver submitted the claim.
RACV’s motor vehicle premiums are based on a range of factors, including the likelihood of a claim, as well as the anticipated cost of any claim, whether for repairs or for a write-off.
We also consider the age, make, and model of the vehicle, as well as where it is kept (for example, in the street or in a locked garage).
“We also consider the owners’ and drivers’ age, driving experience, and claims history,” they explained.
Additionally, some insurers, such as Budget Direct, can consider “theft, attempted theft, or a malicious act” as an at-fault claim.
Why am I being denied insurance cover if my car gets stolen?
Insurers can legally decline to renew an insurance policy for a variety of reasons, according to a spokesperson for the Insurance Council of Australia.
An individual’s claim history can be included in this, for example, if a policyholder has made multiple claims within a given timeframe, or if the insurer becomes aware of new information that changes the policyholder’s risk profile, according to the ICA.
Furthermore, if an insurer refuses to cover you, there isn’t much you can do. Consequently, consumers have fewer protections and rights when it comes to rising insurance costs.
Insurers refusing to provide insurance coverage are within the jurisdiction of the Australian Financial Complaints Authority (AFCA), according to Chris Liamos, Senior Ombudsman for Insurance.
“We can only deal with these types of complaints if the complaint is indiscriminate, malicious, or based on inaccurate information, if the complaint was misinformed about the insurance cover, or if it was a medical indemnity product,” Liamos told Drive.
