Novated Lease Company Collected Funds for Insurance but Didn't Insure Vehicle

AussieDolphin on 10/04/2021 - 10:09
Last edited 10/04/2021 - 10:37 by 1 other user

Hello,

About a month ago someone reversed into me and damaged my bumper at a shopping centre. I was not at fault. The repair cost is $1,800. The driver denied wrongdoing despite witness evidence as well.

When I contacted my insurance and after waiting days they said that my vehicle was not insured and that my cover had expired 10 months earlier! I was shocked because when I changed employers my lease became grandfathered and I received a new budget for everything including comprehensive insurance. All deductions to do with this vehicle are taken from my pay every two weeks. I was asked to submit a complaint in writing which I did within the first week. I was promised a response within 4 days but didn't get one until a month later. The leasing company have refused to repair the damages to my car as I was not insured at the time and told me that I can use the $1000 they held in my account for insurance towards the repair and I must find the rest to fix my vehicle.

I don't agree with their decision and have responded accordingly. They will not admit to administration errors in their department. The reply that took a month was brief and they did not address everything in my complaint. Has this happened to anyone else? My previous leasing company was excellent and unfortunately, the place I work for now only has a contract with this organisation and I can't even move it to somewhere else unless!

Automotive

Comments

    • AussieDolphin on 10/04/2021 - 10:20
      +3

      Yes, all the paperwork to do with the lease clearly states comprehensive insurance. I meant that I didn't know if I was writing this problem in the correct forum as OB as many different ones.

      • deme on 10/04/2021 - 10:22
        +1

        I'm serious about the contacting ACA.

        I'm annoyed that you are asking for help but by keeping the name of the company secret you aren't helping anyone else who searches for the company name.

        • AussieDolphin on 10/04/2021 - 10:24

          Do people normally name companies that are horrible on here?

          • deme on 10/04/2021 - 10:25
            -1

            @AussieDolphin: Yes, yesterday McDonald's gave me only a small amount of ice cream in my cone.

            • pegaxs on 10/04/2021 - 10:29
              +4

              @deme: Can't wait for you to open that as a worthless post…

            • AussieDolphin on 10/04/2021 - 10:32

              @deme: Ha ha ha, I'm sure McDonald's would have replaced your icecream without a problem.

            • burningrage on 10/04/2021 - 10:53

              @deme: You think that was bad? Yesterday I bought a bucket of chicken (I think 10), half of them were wings

              Oh I forgot to name the company. KFC. :-)

      • spal on 10/04/2021 - 11:12

        Not sure why that was the first response you received. I see that you are a long-standing contributing member.

  • Quantumcat on 10/04/2021 - 10:20
    +11

    I'm not sure what you can do but just want to extend my sympathies. What a horrible company.

    • AussieDolphin on 10/04/2021 - 10:23
      +2

      Thank you, I'm so upset about it and am currently investigating if the ACCC would be the next step. I've rejected their response and asked to talk to someone higher. This probably won't help. I just want my car repaired. I haven't done anything wrong.

      • djkelly69 on 10/04/2021 - 10:37
        +1

        Is there an ombudsman that has authority over them?

        • AussieDolphin on 10/04/2021 - 10:39

          I don't know. I'll try Google this now. Thank you

          • hashtagbargain on 11/04/2021 - 00:45
            +1

            @AussieDolphin: I think afca deals with insurance as well. But your case is special as it goes across lender as well. Worth a try.

        • Trance N Dance on 10/04/2021 - 13:31

          Are leases considered a financial product or simply a contract between parties?

      • Gina Rinehart on 10/04/2021 - 23:21
        +2

        ACCC are toothless, you'll need to go to fair trading (or equivalent in NT). Or an ombudsman /industry regulator if one exists for this specific thing.

  • burningrage on 10/04/2021 - 10:49
    +10

    It's almost like that like story called "A Series of Unfortunate Events".

    You got hit (reared). Despite the unwritten rule that if you got hit, the perpetrator will almost always be at fault, the driver denied liability
    You got misled (paid for insurance but no insurance). Your salary money was taken to pay for something you thought was covered but in fact not so.
    You got denied (the leasing company cut you off). The leasing company didn't want to admit mistake and now wants you off their books real fast.

    I really don't know where to start but legal action to the highest degree sounds reasonable against the leasing company.

    • AussieDolphin on 10/04/2021 - 10:52

      I will contact the ACCC on Monday. Hopefully they will be able to direct me. According to the novated leasing company website, they promise to resolve complaints within 5 business days or it gets escalated to a dispute resolution team. Neither happened and this is what they are telling their customers.

      • burningrage on 10/04/2021 - 10:55

        Pray thee this is not AccessPay.

        • AussieDolphin on 10/04/2021 - 11:03

          What do you mean?

          • burningrage on 10/04/2021 - 12:17

            @AussieDolphin: Oh I had a pretty ordinary experience with Novated Leasing company from SA by the name of AccessPay.

            So I am hoping it is not this mob you are dealing with. It is now owned by SmartGroup.

      • Trance N Dance on 10/04/2021 - 13:32
        +4

        Contact fair trading of the relevant state. They're more likely to do something than the ACCC.

      • avoidfullprice on 11/04/2021 - 12:15
        +1

        Reading your previous post OPs I feel sorry for your situation and this does add to the series of unfortunate events. However, I doubt you will get anything favourable from ACCC with regard to state of your vehicle insurance.

        If you still have the other driver's details, make a claim through small claims court. there is a form on the website there to fill out.

        While you at it, make sure you take out a comprehensive insurance now, set a market value that in the event of a total write off, you get the debt off the leasing company. Claim that through the leasing company rather than the $1800 repair. Pursue the repair cost through claim court.

        Claim that repair out of your lease only benefits you from tax concession. You are still claiming money out of your future pay.

  • undefined on 10/04/2021 - 10:50
    +3

    I have had a novated lease in the past and what was taken out of my pay was the budgeted expenses for the type of vehicle. I still had to organise and pay for any expenses related to that vehicle (ie rego, insurance, service costs then claim the money back from my lease account. The only automatic payment was the car loan payment. Perhaps this is the case with the your new leasing agreement.

    • AussieDolphin on 10/04/2021 - 10:53

      The only expense I had to claim from the company was for my annual vehicle registration as the MVR sends me the notice. Everything else to be covered by them was documented and budgeted for.

  • AndyC1 on 10/04/2021 - 10:53
    +13

    As its a lease it should be a financial agreement and therefore your next option is to make a complaint to https://www.afca.org.au/ . If you want it resolved as fast as possible let the leasing company know that you will be making a complaint and they have 48 hrs to get back to you if they will be changing their mind and if they do respond with delaying tactics or say no or the 48hrs occurs then make a complaint.

    • spal on 10/04/2021 - 11:10
      +6

      Definitely this. Also, try consumer affairs if you are in Victoria, or the equivalent in your jurisdiction. When they have offered you $1000 worth of collected but unpaid premiums, they have pretty much admitted their guilt. There actions would probably be misleading and deceptive conduct.
      ACCC will probably take action only if there have been previous complaints.
      Maybe also try APRA. They are the insurance regulators. They might see this as attempt to offer insurance without license, because they kept the insurance premium.

      Also, you should challenge the insurance findings. Make a complaint to AFCA for this too. You have witnesses who support your case. If you go to AFCA, insurance will play ball. Then you might not have to pay $1800, plus recover the premium payments from the lease provider.

      • AndyC1 on 10/04/2021 - 13:10
        +1

        Thanks. Did not think of APRA.

  • Almost Banned on 10/04/2021 - 11:14
    +1

    Unless what?

    • WreckTangle on 10/04/2021 - 11:36
      +6

      Unless… someone like you cares a whole awful lot, nothing is going to get better, it’s not - Dr Suess

    • SF3 on 10/04/2021 - 11:48
      +1

      Cliff hanger moment…

      OP’s device 0% battery, what a run of misfortune.

  • thatonethere on 10/04/2021 - 12:37
    +2

    As other people have said contact AFCA if your written complaint has gotten nowhere. For my novated leases I have made sure I always gotten the insurance documentation (when younger I saw a similar issue where our employer had committed to paying our car insurance each year as part of a salary package - they did for one year and then "kinda forgot" the following years one guy wrote off his car and was screwed as the company went broke).

    • FoxJump on 10/04/2021 - 12:44
      +4

      To confirm, the insurance deductions are just for budgeting the insurance expense. It is a separate matter if they insure your car or you do it and get a reimbursement.

      Normally novated leases will provide insurance cover for you unless you ask not to. If you ask not to they will require a certificate of insurance before they even do the novated lease. I have gone this route twice, each time with a different company.

      Given they never asked for an insurance cert from you then they must have been covering you. I imagine it's a bulk cover that covers all the vehicles in their books.

      So for you to find they're not covered it's super shit. Are you sure you don't have insurance cover, or simply the event is not covered?

      Eitherway it's a major (profanity) in their part. Please name and shame. Complaints to the moon!

  • avoidfullprice on 10/04/2021 - 12:50
    +1

    I received a new budget for everything including comprehensive insurance.

    That's where they confused you. Budgeted doesn't mean it has been expended. Like fuel - you have to go to petrol station to fuel up regardless if they budget $40 a week for fuel.

    I'm assuming you use your old lease company default insurer? That's a key bit of information. Because when it lapsed, how were you notified of the renewal?

    If i were you, I would complained the fact that the lease company did not confirm your insurance is in date on renewal date, as you would taken action to insure the car. When I took out insurance myself for my leased car, I have to prove to my leasing company my insurance is in date annually. Have they done that due diligence?

    Personally, I believe the car owner is responsible to ensure insurance is in date.

    • thatonethere on 10/04/2021 - 13:13

      Yeah good point. Novated lease providers let you choose between their insurer or bring your own. From the OP description it was BYO as it was a budget….

  • hellobargain21 on 10/04/2021 - 13:50
    +3

    I use to work for a Novated Lease company. Normally with the Insurance if you have elected to go with their provider then they will automatically renew it for your. If you have chosen to go with your own provider you would need to send in the documents (invoice) before the due date so they can arrange the payment for you on your behalf. Alternatively you can pay for it first and they will reimburse you for the pre-tax funds they have been taking out of your cycle pay. Sounds like that's what the $1000 is for.

    • thatonethere on 10/04/2021 - 14:40
      +1

      Also op be careful as may be contract requirement for you to insure your car as part of the lease.

  • holdenmg on 10/04/2021 - 16:43
    +2

    Your thread stands out because you had a reasonable belief that your leased vehicle was insured.

    If previously the Vehicle Insurance was arranged by the first Lease Company, how did they expect you to arrange Insurance over a Leased Vehicle? I understood Leased Vehicles were owned by the Finance Company and if that is so, I would have thought your insurable interest is less certain than that of the "owner"

    I presume the Renewal Notice would have gone to the First or Second Lease company. You probably wouldn't know when it was due (or turn your mind to it).

    Also, when they say "I can use the $1000 they held in my account for insurance" I'm trying to understand the why of that… Was this money in a Trust Account to be drawn against to satisfy an Insurance Renewal when received, it makes me wonder if they are or should have Authorised Deposit Institution ADI (or similar).

    I hope you have secured a Cover Note (assuming Insurable Interest) to Cover the Vehicle in the interim while you get it sorted.

    I presume the funds were a Bank Direct Debit, otherwise you might have some sort of claim via Mastercard or Visa for Insurance paid for but not received.

    • thatonethere on 10/04/2021 - 18:19

      Novated lease companies make sure you own the car and the liability. They just have an interest in the car via PPSR. Hence often requiring you to insure the car.

    • hellobargain21 on 10/04/2021 - 18:20
      +1

      The renewal notice would of went to OP, if it was their own choice of insurance, that's how most companies manage it see my comment above. During the transition from change of employers hence change of lease companies, I imagine that the previous lease company would of sent summary/termination details to the OP which would of included who is the current insurance provider and the expiry date etc….

      Also surely when the new company taking over the lease, they would of explained their process of handing customer insurance, they would of either advised OP to cancel their current insurance and go with their provider or they can continue with their choice with the options as I have mentioned above.

      Each pay cycle an amount of OP's pay is deducted from payroll pre tax and sent to the leasing company and those funds are kept in their 'trust' account to be used on the running balance expenses of the vehicle.

      • AussieDolphin on 10/04/2021 - 23:38
        +2

        I didn't receive a renewal notice at all. The leading company did not inform me of anything you said.

  • Tonyh87 on 11/04/2021 - 08:49

    Use the $1000 to get bikies to make the other party reconsider if they are actually at fault.

  • kiitos on 11/04/2021 - 10:50
    +1

    What does the new company's paperwork mention about insurance?

  • eyesky on 11/04/2021 - 14:42
    +2

    The unfortunate event here is the change of Salary Packaging provider.
    I’ve worked in this industry extensively, and you appear to have slipped between a crack here.
    You previous provider may have provided insurance for you, so you never considered it (this is common and profitable for the company).
    Generally a finance provider will require a certificate of currency (insurance) to release finance, but often this requirement is only followed up in the first instance (not every renewal). That doesn’t mean it’s the finance companies fault your insurance wasn’t renewed, just that they didn’t follow up.
    When you change salary packaging provider, the new one obviously doesn’t provide automatic insurance as part of your package. Many people prefer this as they can usually get a better deal themselves elsewhere. They have deducted money to cover insurance (along with all the other running costs), but not taken out insurance for you. Again unfortunately it’s not the salary packaging providers responsibility to ensure you are insured.
    I can totally understand how this event has occurred, but I think you have a problem blaming either the financier, the salary packaging provider or the previous insurer for this event.
    However you will definitely have a claim against the other drivers insurance or them directly for the damage caused and witnessed. I would direct my energy there as you will get much further imo. And they are the ones that should be liable too.
    The only way the financier would pay is if they decide to make a good will gesture, and I can’t see how they are at fault here. The time to respond, while annoying, is also really irrelevant to the issue.
    The other consolation is that you found out this way not via an accident where you were at fault for unlimited damage elsewhere.

Login or Join to leave a comment
Login Join