Insurance company pays €8,500 after it turned down a claim by driver whose Mercedes caught fire

The Financial Arbiter has ordered the insurance company Citadel Insurance to pay €8,500 to the owner of a Mercedes C. Class after it turned down a request he made for compensation for the damage caused to his car when it suddenly caught fire in May of last year.

The owner complained that the company turned down his claim because the fire began from the catalyser and according to them, he had never serviced it. It said that this led to parts surrounding the catalyser to catch fire which spread throughout the whole car.

However, they told him that because he was a good client, who had 11 cars insured with them, they were ready to give him  €6,000 ex gratia. On his part,  the owner refused this offer because he said the catalyser could not be serviced because it is sealed and is only changed after around 160. kms. He said the insurance company asked him for something which could not be done, to avoid paying the claim.

During his testimony, the car owner presented various concrete evidence to show that he took good care of his vehicle and, in fact, the surveyor, who checked it every year, also testified that the car was in excellent condition.

In his decision, the Financial Arbiter, Dr Reno Borg said that one cannot blame the car owner for not doing his duty when he used to take his car to the mechanic for service regularly. He added that it is not reasonably expected for an owner to take his car for a service to the importer whose charges for a service costs much more, as can be seen from this case. He said that if everyone had to take their car to the agent, every owner would spend a long time waiting for a service. He pointed out that the insurance company did not provide any evidence that the mechanic was not competent to carry out a good service on the car.

The Arbiter said that the owner had fulfilled his obligation to take the car for a service regularly, the car was in excellent condition and in fact the insurance company has always relied on the report by the technician appointed by the owner. It said that no one could have predicted what would happen and it does not result that the owner did something wrong for which he should be blamed, as was being alleged by the insurance company.

He said that the catalyser needed to be changed after 160 km…. mileage which the car had not yet reached, and therefore he concluded that there had not been any negligence.  He added that one needs to appreciate that for the owner whose car caught fire this was a great psychological loss because it was like his “baby”.

In his decision, the Arbiter concluded that the complaint was fair, equitable and reasonable, and ordered the insurance company to pay him the sum of €8,500.