The Australian Financial Complaints Authority (AFCA) has ruled Suncorp must pay another $15,000 for a home and contents claim lodged by complainants representing the estate of their late mother.

But the dispute mediator rejected the complainants’ submissions that they could claim for losses caused by “escape of liquid”, which is an insured event under the policy held with the insurer.

The complainants’ mother had died in the house but her body was not found until some days later, leading them to believe their claim met the conditions for “escape of liquid” policy triggers.

“Under the insured event ‘escape of liquid’, the policy provides cover for loss or damage caused by liquid leaking, overflowing or bursting from only the listed appliances, fixtures, household items and pipes,” AFCA said.

“None of those relate to the circumstances of the damage in this case (which was the escape of bodily fluids), although I acknowledge the complainants’ submissions on this point.”

The complainants had lodged the claim in February for damage to the property.

Suncorp has already accepted the claim, paying them up to the policy limit of $15,000, less the $1000 applicable excess, for the costs associated with the specialist cleaning of the property and removal of bio-hazard materials.

The insurer says the payment fell under the policy’s additional cover for “damage from physical injury or incident”, which applies when the damage is the result of “physical assaults or death whether natural, suicide or murder” and also “forensic or police investigations into the above”. It includes cover for the costs of specialist forensic and other cleaning services, and removal of bio-hazard materials.

However the complainants believed they were entitled to a bigger payout to cover them for out-of-pocket expenses they have incurred to have the property reinstated to a liveable state.

They complainants also want to be indemnified for the loss of their mother’s possessions, which they have valued at $106,000.

AFCA says the policy did not indemnify for the type or extent of compensation they are seeking but ruled Suncorp has to make a further payment for contents damage because the provision for additional cover in the insurance documents starts by referring separately to home cover and contents cover.

Calling the provision “ambiguous”, AFCA says “it is fair that the limit be applied separately and independently to the home and to the contents, both of which are insured under the policy”.

“I acknowledge there was only one incident. In this claim and complaint, however, the policy is for both home and contents,” AFCA ruled. “I consider it fair in the circumstances that the $15,000 policy limit for ‘additional cover’ be applied separately in respect of the damage to the home, and damage to contents.”

Click here for the ruling.