Account of the case
The Customer had bought a pre-owned Tesla from a Finland-based used car car dealership on 3 February 2022. The transaction resulted in a dispute with the Seller, leading to a court case, due to problems emerging in the car which were, e.g., related to charging. During the handling of the dispute, the car was in the custody of the Seller from 18 February 2022 to 28 June 2023. The Customer told that whilst picking up the vehicle from the Seller’s premises they noticed a damage in the right-hand side body sill. The Customer found that this was a case of vandalism and filed a police report in the case. The Customer has claimed compensation for the damage to the car from their voluntary motor vehicle insurance.
On 30 August 2023, the Insurance Company informed the Customer that the damage to the right-hand body sill, probably caused by faulty jacking up, would be reimbursed as a damage caused by an external actor. However, it was not a damage caused by vandalism.
On 7 September 2023, the Customer sought redress to the decision on the claim made by the Insurance Company, reporting the the dispute with the Seller had ended with the sentence issued by the District Court on 24 May 2023, and the Seller was supposed to pay compensation. The Customer had noted the damage to the body sill on 28 June 2023 when picking up the car. The car battery was completely dead and the car had to be towed to the repair shop. When picking up the car from the repair shop on 30 June 2023, the Customer had noticed that the wheel was not directed correctly, and the car showed an alarm for a defect. The following day, the car no longer started and was towed to the repair shop.
In its decision on the claim dated 26 September 2023, the Insurance Company reported that while handing the case, it became clear that the car had been salvaged in a damaged condition in Toronto, Canada, after which the car’s spoilers and chassis had been inadequately repaired in Poland. The Insurance Company therefore found that, with the exception of the body sill, the damage to the car had originated at a time before the Insurance took effect, and so they were not compensated.
In the redress of 16 October 2023 sent to the Insurance Company, the Customer claimed that the car did not have any external damage when it was left to the Seller. According to the Customer, the car had been approved in the inspection on 12 January 2021 and 11 February 2022, so the Insurance Company’s allegation about a failed repair in Poland was wrong. The Insurance Company did not change its view in the decision dated 15 December 2023. The damage caused by jacking up, accepted for compensation, did not prevent the car from being used so the towing expenses claimed by the Customer were not reimbursed.
On 3 January 2024, the Customer again sought redress due to the negative decision on the claim. In the decision taken in the Company’s internal redress procedure on 30 January 2024, the Insurance Company found that based on the inspection photos taken on the car, there was no evidence of vandalism but the car had earlier been inadequately repaired at which point some of the parts had not been attached or had been deficiently fastened. One bolt was missing in the fastening of the front suspension arm. Moreover, the car bottom showed signs of the bottom having hit something. The damages were not signs typically caused by vandalism, i.e., deliberate damaging but a consequence of inadequate repairing. The fact that the car had passed the inspection did not show that the damage had been caused by an insured event reimbursable by the Policy. The Customer had been given a link to photos taken in Toronto, evidently after the damage had taken place.
Customer demands and Insurance Company’s position
The Customer claimed that the Insurance Company pay a compensation of euro 6 819.53 for the damage. The Customer explained the iter of the claims handing process and pleaded the matters presented during the procedure. The damage that had taken place in Toronto affected the side of the car, not the chassis now damaged.
In their reply, the Insurance Company contests the Customer’s claim and refers to the decisions issued on the claim. The Insurance Company finds that the Customer had not specified – not even in the manner required by the Policy Terms, Para 22.3.1. and not even approximately – the time in which the defects, deficiencies and damages in the car had originated. Therefore, the fact that the car had passed the inspection of 11 February 2022 has no significance for the assessment of the compensability of the defects, deficiencies and damages noted in the chassis as far as the the vandalism insurance is concerned.
According to the Insurance Company, the defects, deficiencies and damages found in the car chassis are not typically caused by vandalism but refer to a careless repair of the car prior to the insurance policy taking effect. Should the car not have been driven, as suggested by the Customer, the signs suggesting bottom contact have probably originated prior to the policy taking effect.
In the additional letter, the Customer criticised the claims handling process and insisted on the fact that the car had passed the inspection. Therefore, the car did not have the defects prior to the inspection of 11 February 2022. The Customer also reported that during a telephone conversation, the Insurance Company representative had told that the 295 euro towing cost from the repair shop to the Customer’s place would be compensated by the Policy.
Contractual terms and legislation
Under Section 9 Subsection 1 of the Insurance Contracts Act, if the Insurer or its representative has failed to provide the necessary information or has provided incorrect or misleading information to the Policyholder when marketing the insurance, the insurance contract is considered to be in force as the Policyholder had cause to understand on the basis of the information received.
According to Section 9 Subsection 2 of the Insurance Contracts Act, the provisions of Subsection 1 also apply to situations where incomplete, incorrect or misleading information provided on the insurance during its validity can be considered to have affected the Policyholder's conduct. This does not, however, apply to information given by the Insurer or its representative on compensation or benefits payable after the occurrence of an insured event.
Under the terms of the voluntary motor vehicle insurance, valid as of 1 January 2022, Para 22.3.1 (Compensable damage), the vandalism insurance covers the damage caused to the insured object due to malicious damage the place and date of which can be defined accurately. Malicious damage refers to the damage caused to the insured object with explicit intent to cause damage. […]
Recommended solution
This case is about assessing whether the damages found in the car chassis are a consequence of malicious damage as defined in the Policy Terms. According to the applicable Policy Terms, malicious damage refers to the damage caused to the insured object with explicit intent to cause damage. FINE points out that the Claimant has the burden of proof for the damage to be compensated on the basis of the Insurance Policy.
According to the information acquired by the Loss Assessor of the Insurance Company, the car had had a damage to its side earlier in Toronto, and according to the Loss Assessor such damage was most probably the reason for the damage in the chassis of the vehicle. The car was damaged to the point of being salvaged and had been brought to Poland for repairs. The Customer pleaded the fact that the car had passed the Finnish inspection on 11 February 2022.
According to the information presented on the damage, the car bottom panels did not match, and the bottom showed signs of ground touching. Based on the photos, a fastening bolt was missing from one supporting arm. Based on the photos presented and information obtained in loss assessment, FINE finds that the quality of the damage found in the car does not match what is typically caused by malicious damage but rather suggest that at some point, the car has been subjected to failed or inadequate repair measures. Therefore, FINE finds that it has not been shown that this would have been a case of an action of explicit malicious damage and therefore finds that the decision on the claim taken by the Insurance Company is appropriate.
As regards the Customer referring to the telephone conversation with the Insurance Company representative who would have said that the car towing cost from the repair shop to the Customer would be compensable by the Insurance Policy, FINE finds that this was a case of advance information on a future compensation as per Section 9 Subsection of the Insurance Contract Act which, according to the Law, had no binding effect on the Insurance Company.
Final outcome
FINE does not recommend a change in the case.
FINE
Advisory Office, the Finnish Financial Ombudsman Burea
Senior Legal Counsel Isokoski
Presenting Officer Nikunlassi