The financial services ombudsman has backed insurer Chubb in a dispute over whether it fairly increased a customer’s storm deductible. 

The row began when the policyholder lodged a claim for storm damage. The insurer found the repair amount – $23,000 – was below its storm deductible of $25,000 and the claim could not proceed.  

The claimant’s broker argued the insurer had “silently” and deceptively increased the deductible from $10,000 when the policy renewed in 2022.  

It said Chubb had failed in its obligation to be “clear, transparent, fair and timely in ... communication”, noting it sent renewal terms the day after the policy expired.  

The claimant argued it would be fair for the insurer to accept the claim based on the previous $10,000 deductible and cash settle for $13,000.  

But Chubb said the information was disclosed in policy documents, and the onus was on the broker to review these before accepting them.  

Information presented to the Australian Financial Complaints Authority showed Chubb sent a renewal letter and invitation on November 1 2022, a day after the policy expired.

However, it had also notified the broker two weeks before the expiration that it would apply a 14-day cover extension to allow for a review of renewal documents.  

The insurer noted its renewal invitation showed the $25,000 storm deductible.  

In its dispute decision, AFCA accepts the insurer gave the broker sufficient time to consider the policy documents and accept the terms.  

The authority says the 14-day cover extension allowed the broker to thoroughly read the renewal terms, consult with the policyholder and raise any issues about the storm deductible.  

It adds the $25,000 deductible was “clearly and unambiguously expressed in the renewal invitation”.

“It is the complainant’s responsibility to review the policy terms to ensure it is suitable for their needs” an AFCA ombudsman said.

“The insurer cannot be held responsible if the complainant is unclear about any of the policy terms and did not question their inclusion.  

“I am satisfied the insurer has assessed the claim correctly by relying on the terms of the policy. I am also satisfied there is no evidence the insurer misled the complainant when adding the specific peril deductible endorsement.”  

Click here for the ruling.