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

EQT's Bold Move: A $3.41 Billion Bid for AUB Group

18 Dec 2025: Paige Estritori

In a significant development within the Australian insurance sector, Swedish private equity firm EQT has extended a takeover offer for AUB Group, valuing the insurance broking company at A$5.25 billion (US$3.41 billion). This proposal includes a price of A$45 per share, representing a 25.1% premium over AUB's last closing price. Following an earlier bid of A$43 per share, AUB has granted EQT exclusive access to its financial records for six weeks starting October 8 under a confidentiality agreement. - read more

Suncorp's Strong Financial Performance: $1.49 Billion Profit and Share Buyback

18 Dec 2025: Paige Estritori

Australian insurer Suncorp has reported stronger-than-expected full-year cash earnings of A$1.49 billion for the fiscal year ending June 30, 2025, surpassing the consensus estimate of A$1.47 billion. Statutory profit surged 52% to A$1.82 billion due to one-off gains from the sale of its banking operations. The company, now solely a general insurer, benefited from improved insurance margins, higher policy prices, and increased investment returns. - read more

ACCC Raises Concerns Over IAG's Proposed Acquisition of RAC Insurance

18 Dec 2025: Paige Estritori

Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), has raised concerns over Insurance Australia Group’s (IAG) proposed A$1.35 billion (US$877 million) acquisition of the Royal Automobile Club of Western Australia’s (RAC) insurance business. The ACCC warns that this deal could reduce competition in Western Australia's motor and home insurance markets. Specifically, the watchdog fears it may lead to higher premiums, reduced service quality, and potentially restrict competitors’ access to affordable and efficient vehicle repair services. - read more

RBA Holds Cash Rate at 3.60%, Forecasts Extended Stability

10 Dec 2025: Paige Estritori

The Reserve Bank of Australia (RBA) has announced its decision to maintain the official cash rate at 3.60% during its December meeting, signaling a potential extended hold through 2026. This move comes in response to higher-than-expected inflation rates and a robust economic performance. - read more

ANZ CEO Nuno Matos Takes Helm at Australian Banking Association

10 Dec 2025: Paige Estritori

The Australian Banking Association (ABA) has appointed Nuno Matos, CEO of ANZ Group, as the new chair of its council, succeeding National Australia Bank's Andrew Irvine. This leadership change marks a significant moment for the ABA, which plays a pivotal role in shaping industry policies and consumer protections within Australia's banking sector. - read more

Click for more Insurance News

Insurance Articles

Understanding Home Insurance Coverage Options: What Protects Your Property?

Home insurance is a critical element for any Australian homeowner, providing financial protection against an array of unexpected events. Essentially, it's a policy that covers losses and damages to an individual's residence, along with furnishings and other assets in the home. This type of insurance also offers liability coverage against accidents in the home or on the property. - read more

Boat Insurance: How a Specialist Broker Can Save You Time, Money, and Hassle

Boating can be an enjoyable pastime, but it also comes with risks. From accidents to theft, unexpected events can take a toll on your finances and boat. This is where boat insurance comes in. Boat insurance provides financial protection in the case of accidents, theft, or other damage to your vessel. - read more

The Role of Life Insurance in Your Overall Financial Strategy

Financial planning plays a pivotal role in managing your economic resources effectively. By assessing your income, expenses, and goals, you can create a plan that helps achieve financial security. A comprehensive financial plan covers saving, investing, budgeting, and managing liabilities to secure your future. - read more

Comparing Comprehensive, Third Party, and Third Party Fire and Theft: Which Car Insurance is Right for You?

Car insurance is a crucial aspect of vehicle ownership in Australia, offering protection and peace of mind in the event of an accident or other unforeseen circumstances. However, with numerous options available on the market, choosing the right policy can be overwhelming. In this article, we'll explore the main types of car insurance available to help you understand your choices. - read more

Business Insurance Essentials: What Every Australian Entrepreneur Should Know

Running a business comes with its fair share of risks and challenges. From natural disasters to employee injuries, there's a lot that can go wrong. This is why having the right business insurance is crucial for any Australian entrepreneur. - read more

Knowledgebase

Endorsement:
An amendment or addition to an existing insurance policy that changes the terms or scope of the original policy.

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.