A sole trader who was unable to work for more than three months after injuring his back while carrying a door frame has won a claim dispute with Suncorp for around $7000 in accident cover and been awarded $1000 compensation.

The Australian Financial Complaints Authority (AFCA) said the injured carpenter was left without income for a substantial amount of time without certainty regarding the resolution of his claim and this affected his peace of mind and caused an “unusual degree” of inconvenience.

“This is a claim for weekly benefits to a person who is unable to earn an income. Clearly, such a claim should be processed expeditiously given the financial impact it has on an individual,” AFCA said.

“I accept the carpenter suffered an accident which left him totally disabled for a period of up to 102 days,” AFCA’s ombudsman said. “It is now 10 months since the carpenter incurred the loss. I consider it is not reasonable or fair that the carpenter’s situation is prolonged indefinitely.”

The carpenter sustained the back injury while performing heavy lifting and installing doors on June 11 last year. He kept working for a few days but the pain became worse and he eventually had to call an ambulance to take him to hospital.

A diagnosis of back pain and sciatica in the left leg was affirmed in a Suncorp claim form by his treating doctor, who confirmed the carpenter was totally disabled from June 11 2020. After receiving treatment, the carpenter returned to work on September 21 2020.

The claim was lodged two weeks after the injury occurred under a business insurance policy held with Suncorp which had a personal injury component and nominated a weekly benefit of $500.

Suncorp requested a Medicare form be completed as the carpenter had no regular doctor, and in September last year sought his recent medical history directly from Medicare. By April, this had still not been provided and the carpenter went to AFCA, saying the process was unfair as he was forced to go without income for a significant time.

AFCA determined Suncorp had “effectively put a hold on the claim” and should cover the loss, with interest and compensation.

“It is not fair that the claim be delayed indefinitely pending receipt of information for which the insurer has no timeframe,” AFCA said.

Suncorp had “not adequately exhausted its other options to properly investigate the circumstances of the loss".

"This has delayed the claim,” AFCA said. “It has unfairly prejudiced the carpenter and left him in financial difficulty. It is unfair.”

AFCA said Suncorp could have explored alternate enquiries to independently verify the merits of the claim. The insurer had raised no suggestion the claim was not genuine and there was no evidence to indicate a pre-existing condition.

AFCA suggested the carpenter’s treating doctor or his previous health providers could have been contacted.

Suncorp also made an error in obtaining the wrong Medicare form for the carpenter to sign, AFCA said, and delays were then “exacerbated by the insurer’s decision to wait on Medicare to respond rather than conduct its own enquiries, which it was able to do”.

The carpenter supplied all his available medical history for three years back to April 2018 from a government website showing dates, specialist names and payments, to which he added annotated notes on the nature of these consults. None were identified to be relevant to back treatment and AFCA said there was “no evidence to doubt the veracity of this information”.

The carpenter previously met with physiotherapists for occasional back treatment, although none related to a serious or ongoing issue and this was typical of working in a labour-intensive industry.

Suncorp said that the information provided was not sufficient for it to assess the claim and wanted a five-year medical history.

“There is no explanation to show why the insurer should be entitled to a five-year background of medical cover,” AFCA said. “It has not shown why this is necessary, or why it could not at least attempt to obtain this information from other sources.”

Suncorp argued it was unable to verify the carpenter’s medical history and due to delays caused by Medicare, could not process the claim. After several emails to Medicare, Suncorp received an automated response on March 8 stating “we are in a peak processing period and experiencing high demands” and that sending requests for updates would “delay the processing”.

“Given the carpenter has since recovered and returned to work, I am of the view it is unreasonable and unfair to delay the claim further,” AFCA said.

See the full ruling here.