The financial services ombudsman has rejected a man’s bid for a car damage payout after the policyholder – his ex-wife – blocked his access to the cash.  

The man, who had shared access to the policy, lodged a claim after his Toyota Landcruiser was involved in an accident last April.  

He said he accepted a cash settlement of $55,950 and stated the money should be sent to him.  

But his ex-wife revoked his access to the policy about two months after the claim, and IAG said it was obliged to pay the woman unless she directed otherwise.

The man said this was unfair because he was the car’s registered owner and paid the policy premiums.  

He said if he had known the cash settlement would not go to him, he would have chosen to have the car repaired. The vehicle has since been scrapped.

AFCA says the ex-wife probably also had an interest in the car, because she was the listed policyholder.

It notes the woman clearly indicated she did not consent to her ex-husband receiving the payment and says it would be “unfair to compel the insurer to act contrary to the policyholder’s instructions”.  

But IAG must pay the man $1500 for stress caused by its handling of the matter. AFCA says the insurer should have clarified the “issue of who would receive the cash settlement” sooner.

“The insurer was aware that the complainant was seeking a cash settlement early in the claim process,” AFCA said.

See the ruling here.