AIG was entitled to decline a claim related to copper piping and electrical wiring theft from a refrigerated warehouse as the property, which hadn’t been let due to COVID-19 issues, had been unoccupied for more than 90 days, the Australian Financial Complaints Authority (AFCA) has ruled.

The complainant took out a policy for the purchased property in August 2019. A tenant was vacating and it was intended to re-let the warehouse, but finding a new tenant proved difficult due to the virus outbreak.

The theft took place between April 7 and May 13 last year, according to a police report, and the policyholder lodged a property damage claim with the insurer on May 18.

The complainant says the property was untenanted but not unoccupied as he stored belongings at the warehouse, performed minor repairs, attended the premises regularly and based himself there to operate his business as a property developer.

But AFCA says storing belongings doesn’t mean a warehouse is occupied and the estimated period when the theft took place indicates he didn’t visit the property for more than a month.

A loss adjusters’ report says the premises “were purchased unoccupied and have remained unoccupied” and communications from the broker to the insurer at the time of the claim had advised the building was “still unoccupied”.

On May 25, one week after the claim was lodged, the broker amended the policy to provide additional cover for unoccupied property. The insurer allowed the amendment, but it was made after the loss happened, and at the time of the theft the policy excluded cover for properties unoccupied for more than 90 days.

“The exclusion for unoccupied properties applies to the complainant’s claim,” AFCA says. “Therefore, the insurer is entitled to deny the claim.”

The decision is available here.