A homeowner has lost a bid to have his excess reduced by more than $4000 after claiming for a damaged air-conditioning unit.

The man lodged a claim after the unit’s compressor burnt out in January. Insurer Suncorp accepted it and told the man he had to pay his home and contents policy’s $5000 building claim excess, because the unit had been “permanently attached and hardwired” to the property. 

The insurer noted the policy definition of “building” included “any permanently housed, connected or wired electrical appliances (e.g. a wired oven)”, and said the certificate of insurance identified the home’s AC system as a “building item”.  

It said an AC unit would be considered not part of a building only if it was “attached within a window”.

The man said the motor burnout provision in his contents cover product disclosure statement “clearly mentions electric motors within AC units” and there was “enough evidence” for the claim to fall under the contents cover, meaning a $750 excess would apply.  

He also said Suncorp had told him the excess was $750 before increasing it to $5000 after he paid the initial amount.

In a dispute ruling, the Australian Financial Complaints Authority says the man’s reference to electric motors and compressors “cannot be simply read in isolation”.  

“I acknowledge AC electric motors or compressors are identified in the contents PDS motor burnout covering provision,” an authority ombudsman said. “However, this must be read in the context of, and subject to, a preceding requirement the AC unit must form ‘part of your contents’. 

“When properly considered in the overall context of the policy, I accept that the complainant’s AC unit forms part of his home building, rather than his contents.  

“Given this, he can only claim for it under the motor burnout cover provided with his home building cover, to which the building excess applies.”  

See the ruling here.