The Australian Financial Complaints Authority (AFCA) has upheld a decision by Allianz to reject a farm pack customer’s claim for loss of hay in a fire incident last year, ruling he had not included the site where the blaze occurred in the policy contract.

The customer’s broker, who arranged for the policy online, says the insurer’s application system is confusing, requiring him to read through more than “100 pages” of documents in order to understand the level of cover selected.

But AFCA dismissed the argument and other reasons put up by the customer and broker in their bid to have the insurer accept the $121,750 claim, which is the value of the hay that was destroyed in March last year.

AFCA says the broker did not select the appropriate cover when he first incepted the policy in 2017 and that the onus was on him to ensure his client had adequate cover in line with what had been requested.

“The panel is not persuaded by the broker’s argument that it is required to read over ‘100 pages’ of documents in order to ascertain the level of hay cover selected,” AFCA said. “This is the role of the broker.

“It appears the broker has only added certain [sites] to the policy and not others, and then has not reviewed the policy documents prior to issuing them to its client.”

Allianz had declined the claim on the basis that the hay was not insured at the so-called “R” site in Deniliquin, NSW.

The insurer says the policy provided the customer, who operates a large farming business across multiple sites in NSW and Victoria, with options to select individual sums insured for hay at each individual site or one sum insured for cover for hay across multiple sites.

While the customer did list five sites that he wanted insured, the “R” site was not one of them.

AFCA says the only reference to the “R” site on the certificate of insurance (COI) is in section three under “other endorsements”.

“R is not listed anywhere else on the COI and is not listed as a [site],” AFCA said. “In other words, the R site is not insured for loss or damage to farm property,” AFCA said.

AFCA dismissed the broker’s argument that his client had mitigated risk by storing his hay across multiple sites, including at the “R” location.

“The Panel considers it entirely possible that some situations might present a higher risk of fire due to inherent site conditions, storage conditions and weather at a given situation as opposed to a different one,” AFCA said.

“As such, the Panel is not persuaded the complainant can be considered to have mitigated the insurer’s risk by storing hay at a [site] which was not listed in any capacity [in the policy].”

Click here for more from the ruling.