A policyholder has won an additional $8000 payout and more than 30 days’ accommodation after a lengthy claim dispute over water and mould damage to his apartment.

The insured lodged three claims for storm damage in 2018 after water entered through a defective balcony and roof.   

His insurer, Lloyd’s Australia, agreed to cover the damage and in June 2019 paid a cash settlement of $42,899. The parties also entered into a deed of release that provided future payments for items damaged during repair works and payment for temporary accommodation.

Shortly after signing off on the settlement, the complainant told Lloyd’s the payout would not cover mould remediation work. The insurer agreed to reopen the claim but made no additional payments.

The claimant engaged two restorers between July 2022 and last June, both of whom found elevated moisture readings throughout the property. One said the water ingress appeared to have begun before the insured bought the property but said the policy should still cover the damage.

Lloyd’s said the water ingress stemmed from the complainant’s failure to make repairs after an earlier claim for water damage in 2017. It said it was not required to remediate the issue and noted its policy held exclusions for mould even if it developed after an insured event.

The Australian Financial Complaints Authority agrees the claimant is not entitled to payments for the mould damage. It says the reports were compiled more than three years after the claimed events, and water ingress was present before the loss.

The policyholder, who had yet to undertake repairs, also provided a report from a kitchen fitter who said each of the provisional items included in the settlement would have to be replaced because they would be damaged when removed. He said the insurer should cover the $35,200 cost to replace the items.

AFCA says the fitter’s report is “brief” and does not provide a “detailed explanation” why the items would break on removal.

It does not agree the insurer should cover the cost of replacing the items, but requires it to make a 20% increase to the original claim settlement, amounting to $8571.  

It says Lloyd’s should provide payments for 33 days of temporary accommodation for the complainant. It notes the repairs were anticipated to take 20 to 30 days in 2019, and says while further mould damage has appeared, the insurer is not required to account for that.  

Click here for AFCA’s ruling.