A homeowner whose property was damaged by a cyclone will be reimbursed after a dispute ruling overturned his insurer’s decision to decline to cover what it considered pre-existing damage.

The landlord lodged a claim for building repairs after a cyclone made landfall nearby, causing significant damage to his home on February 8, 2020.

A Bureau of Meteorology report confirmed that a cyclone occurred near the property in a similar timeframe. The insurer’s roofing expert said the storm caused extensive damage in the area with wind speeds reaching 195km/h and severe rain during the event.

The Australian Financial Complaints Authority (AFCA) said the evidence presented shows that the cyclone “had the capacity to cause substantial damage”.

Commonwealth Insurance accepted the claim but only partially covered damaged parts of the house, saying the roof and other areas of the property sustained wear and tear and were not adequately maintained, contributing to their deteriorating state.

The claimant said the leaky roof had no problems before the cyclone and that he had to install buckets during the storm to address incoming water.

An insurer-appointed builder, referred to as JL, said in its initial assessment on October 29 2020, that the building was “in good condition” with no noticeable building defects or maintenance issues. The builder reported no storm-related openings in the roof, which AFCA said was supported in his documentation.

The homeowner said he gathered a second opinion from a roofer as he continued to have issues with the roof leaking.

The roofer attended the property on July 20 last year and found “multiple water entry points”, including to the roof sheets and fixing, which were said to be consistent with cyclone-related damage.

A third opinion from an insurer-hired building consultant, referred to as SW, on January 21 this year, disagreed with the roofer’s assessment, saying the damage was due to uplift pressure over a long period rather than a single storm event. SW determined a lack of maintenance of the roof’s condition allowed water ingress.

The panel considered the assessments of the three experts and determined the cyclone to be the likely cause of the damage.

“Of the available explanations, the panel considers it is more likely the roof was damaged by the cyclone because the leak began during the cyclone and continued afterwards,” AFCA said.

It acknowledged that there had been maintenance concerns but said these issues came from unsuccessful attempts by the complainant to fix the leak. The homeowner said the roofer did some work in December last year to address the issue but could not fix it.

The panel said the insurer’s stance that the roof was in a poor state due to damage caused by foot traffic was not sustained, saying that its experts provided evidence that countered each other’s explanations.

AFCA highlighted JL’s assessment that mentioned there had been no maintenance concerns which contradicted SW’s explanation that a lack of maintenance was the cause of the leak. It said the issues SW raised could have occurred after the initial assessment but was not convinced this was the case.

AFCA said water damage to the building interior was directly attributable to the roof damage caused by the cyclone. The roofer’s report showed deterioration along ceiling linings in several rooms and ceiling sagging in multiple areas.

The panel rejected the building consultant’s assessment that poor maintenance had been the cause for it, noting that the area beneath the bucket installed by the homeowner showed no signs of damage.

“SW has not supplied any evidence showing what other multiple events are the cause, or why ongoing maintenance would result in water stains to ceiling plaster given the roof is leaking,” AFCA said.

AFCA determined that damage to the property’s western fence and gate also fell within cover of the home and contents policy.

The experts all identified that the gate had no longer been working and parts of the fence were no longer verticle. SW said the cyclone was not the cause of the damage but did not provide an alternative explanation for what was the cause.

“Considering the severity of the cyclone and the likelihood it would cause damage to a free-standing structure such as a fence, the panel accepts, on balance, the cyclone is the cause of this damage,” AFCA said.

The panel only required Commonwealth Insurance to cover 50% of any damaged fences the claimant shared with neighbours.

AFCA said it was satisfied that the insurer could decline cover for the veranda roof, saying consistent imagery in SW’s report showed that the claimed damage had existed before the cyclone.

The panel considered that the policy outlined cash settlement or authorised repair work as settlement options.

It said the roofer’s scope of repair appeared to be the most accurate, but due to its age, it could not be considered entirely accurate.

AFCA determined that the insurer organise an engineer to assess the roof’s scope of work and “arrange an actionable quote” based on the roofer’s report before authorising repairs.

It said if the insurer opted into a cash settlement, it must include a 20% uplift of the quote to account for “shifting of the risk” of asbestos and upgrade requirements to the complainant.

The ruling determined that Commonwealth Insurance cover professional costs paid by the homeowner to the roofer for its assessment. It said the report contributed to the panel’s decision and required the insurer to pay $5000 to the complainant.

The claimant was also awarded non-financial losses of $2500 for the insurer’s conduct that caused “physical inconvenience and interference with his peace of mind”.

Click here for the ruling.