Customer Wins in Insurance Dispute Over Laser Equipment

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.

In a recent ruling, a salon owner successfully contested a claim with her insurance provider concerning a dispute over a laser machine.

This case highlights significant issues around insurance policy interpretation and customer rights.

The crux of the dispute arose when the salon's laser machine broke down in February, and repair costs were estimated at $18,069. The salon owner had insured the machine for $50,000 in December of the previous year, following its second-hand purchase and refurbishment in 2012 for $66,000.

Despite acknowledging the damage, QBE Insurance reduced its compensation to $7,286, citing an underinsurance clause. QBE claimed that due to the model being discontinued, a replacement would necessitate insuring at $155,000.

The insurer's clause stipulated that if the sum insured was less than 80% of the "total new replacement value," the liability could be adjusted accordingly. However, the salon owner challenged this assessment, arguing that a comparable refurbished machine was valued between $30,000 and $45,000.

The Australian Financial Complaints Authority (AFCA) intervened, siding with the salon owner. AFCA declared that policy wording began ambiguous, noting discrepancies in terms such as "full value" and "total new replacement value", creating confusion about the clause's intent.

AFCA clarified: "When the policy is read as a whole, it indicates the laser should be insured for its full value, or what it would cost to replace with a similar laser in a similar condition." They refuted QBE's expectation that the salon owner should have insured the laser for $155,000, indicating she would never recoup more than $50,000 under policy terms.

This ruling mandates QBE to cover the repair costs, less the policy’s deductible. The case emphasizes the importance of clarity in insurance contracts and equitable treatment of claims.

Published:Wednesday, 27th Nov 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

AFCA Criticises TAL for Unfair Termination of Income Protection Benefits

16 Nov 2025: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has recently ruled against TAL, a prominent life insurer, for terminating a policyholder's income protection benefits without prior notice. This decision underscores the critical importance of procedural fairness in the management of insurance claims. - read more

Actuaries Institute Highlights Financial Strain of Mental Illness on Insurance Systems

16 Nov 2025: Paige Estritori

The Actuaries Institute has issued a call for immediate action to address the escalating financial strain that mental illness is placing on Australia's insurance and compensation systems. This appeal underscores the pressing need to ensure the sustainability of the nation's financial safety net in the face of increasing mental health-related claims. - read more

Fitch Ratings Anticipates Continued Premium Increases in Australian Insurance Sector

16 Nov 2025: Paige Estritori

Fitch Ratings has projected that Australian insurers will continue to implement premium increases, with gross written premiums expected to grow by mid to high single digits. This forecast is driven by the need to offset rising claims and increased allowances for natural hazards. - read more

Surge in Cyber Insurance Adoption Among Australian Businesses

16 Nov 2025: Paige Estritori

In the past year, BizCover, a leading small business insurance provider, has reported an almost 50% rise in sales of cyber liability insurance. This significant uptick underscores the escalating awareness and concern among Australian businesses regarding cyber threats. - read more

IAG and Ag Guard Forge Partnership to Elevate Crop Insurance for Australian Farmers

14 Nov 2025: Paige Estritori

In a significant development for Australia's agricultural sector, Insurance Australia Group (IAG) has announced a strategic partnership with Ag Guard, a specialist rural underwriting agency. This collaboration will see Ag Guard managing the underwriting for IAG-owned CGU and WFI's crop insurance portfolios starting June next year. - read more

Click for more Insurance News

Health Insurance Articles

Affordable Health Insurance: How to Find the Best Plan for You

Affordable health insurance refers to insurance plans that offer necessary health coverage at a price within one's financial means. These plans aim to balance cost with the quality of care, providing essential services without excessive financial burden. The goal is to make healthcare accessible to a wider population, ensuring that everyone can maintain their health without going into debt. - read more

The Digital Age of Health Insurance: Comparing Policies Online

The dawn of the digital age has significantly transformed the way we approach nearly every aspect of our lives, and the domain of health insurance is no exception. With the arrival of innovative digital tools, the health insurance landscape has undergone a striking evolution, allowing for unprecedented accessibility and convenience in managing healthcare coverage. - read more

Understanding Health Insurance: A Starter's Guide for Young Australians

Embarking on the journey of understanding health insurance is a pivotal stride for young Australians. It's a proactive step that embodies responsibility for one's well-being and financial foresight. Health insurance can often seem like a complex affair reserved for a future self, but grappling with its intricacies early can be both economically savvy and health-conscious. - read more

The Role of Health Insurance in Supporting Preventive Care

Preventive healthcare refers to measures taken to prevent diseases, rather than treating them after they occur. This includes actions like regular health screenings, vaccinations, and adopting healthy lifestyle practices. - read more

The Benefits of Private Health Insurance for Families: Is It Worth the Cost?

Health insurance is a crucial aspect of financial planning for individuals and families alike. It provides protection against unexpected medical costs and ensures that you have access to necessary healthcare services when you need them most. - read more

Knowledgebase

Insurable Interest:
A financial or other kind of interest in the insured item or person, necessary for a valid insurance contract.

This website is owned and operated by Clark Family Pty Ltd (ACN 010 281 008) as Trustee for the Clark Family Trust (ABN 35 957 893 714), 43 Larch Street Tallebudgera QLD 4228. Clark Family Pty Ltd is an Authorised Representative (AR 1298860) of Unique Group Broker Services Pty Ltd (AFSL 509434) for financial product referrals and an Authorised Credit Representative (ACR 401491) of Saccasan Pty Ltd (ACL 386297). Check our licensing details on the ASIC registers: Clark Family Pty Ltd ACR, Clark Family Pty Ltd AR, Saccasan Pty Ltd, Unique Group Broker Services.

IMPORTANT: We do not provide financial product advice or credit assistance. We act solely as an introducer and refer enquiries to licensed third-party intermediaries, insurers, and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for validating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.