Insights for participants
If an insurer wants to decline a claim because a driver was under the influence of alcohol or drugs, they must provide evidence showing it is more likely than not that the driver was impaired. Without a police report or blood alcohol test, proving impairment can be difficult. Suspicion alone is not enough.
What happened?
In June 2024 one Friday evening, Robert met friends at a restaurant bar, where he drank two handles of beer over an hour and a quarter without eating. Upon leaving he reversed his car out of the carpark in the dark, he misjudged the turn and scraped another vehicle. He exchanged insurance details with the other driver, dropped a friend home, and then drove himself home.
As the car was a company vehicle, Robert’s employer lodged an insurance claim. On the claim form, Robert disclosed he had consumed two beers before the incident. The insurer declined the claim, arguing he had been under the influence of alcohol, which was excluded under the policy.
What were the parties’ views?
Robert disagreed with the insurer’s decision, saying he was a responsible drinker and would never drive if he thought he was over the legal limit. He pointed out that there was no police involvement or breath test to prove impairment.
The insurer, however, believed Robert had consumed enough alcohol to affect his ability to drive safely. They considered:
- Robert drinking on an empty stomach.
- Online blood alcohol calculators (BACs), which suggested he might have been close to or over the legal limit.
- A third unexplained transaction on Robert’s bank statement at the restaurant bar, which they believed indicated he had consumed more alcohol than disclosed.
Robert provided two different explanations for the extra transaction, but his friends said they did not recall him buying additional drinks. Nobody—including Robert’s friends, the bar manager, or the other driver—reported that Robert appeared intoxicated or unfit to drive.
What was FSCL’s view?
For an insurer to decline a claim under an alcohol exclusion, they must provide reasonable evidence that the driver was impaired. Without a breath or blood alcohol test, this can be difficult to establish.
We noted that while online BAC calculators can provide an estimate, they do not offer definitive proof of impairment. They also do not account for individual tolerance levels or confirm how alcohol affects a specific person. The insurer’s conclusion that Robert drank more than he claimed was based on suspicion rather than solid evidence. Additionally, the accident itself—a minor scrape while reversing in the dark—was not, on its own, proof of intoxication.
How did FSCL suggest the complaint should be resolved?
We found that the insurer did not have reasonable grounds to decline the claim. Robert had been consistent in saying he drank only two beers, and there was no evidence to suggest otherwise. The insurer was required to pay the claim.
The insurer asked us to reconsider, because they were concerned that the policy in this case was a commercial policy, and there are significant dangers associated with drivers operating commercial vehicles after having consumed alcohol. We acknowledged the concern but noted that if an insurer wants to exclude claims where any alcohol has been consumed, this must be clearly stated in the policy terms.
FSCL’s final decision was that the insurer should pay the claim, which they did, and the case was closed.
