The Australian Financial Complaints Authority (AFCA) has criticised Hollard for its handling of a homeowner’s storm damage claim in a determination that found the insurer to be “disengaged and indifferent to its obligations toward the complainant”. 

The complaint related to a claim lodged by the property owner on March 2 last year after a storm damaged her home. 

Hollard appointed a builder to assess the damage, who, after inspecting the property, advised a roofer should evaluate the cause. A roofer provided a report on April 14, identifying maintenance-related issues as a contributing factor and recommended repairs be carried out. 

The insurer informed the claimant that it would accept liability for the claim and sent the builder an authority to undertake repairs in June.  

The complainant says she was provided with a copy of the scope of works on July 15, and no repairs to the roof were included.  

The insured says she attempted to contact the builder by phone multiple times but could not reach them. On August 19, she emailed the builder to say she was waiting for a new contract that included repairs to the exterior roof. 

The builder responded to the email in late October, saying that there had been no roof repairs included in the scope of works and she would have to pay for those repairs herself. 

AFCA says that Hollard initially informed the complainant and AFCA that it was awaiting payment for the $1000 claims excess and return of contracts to allow the works to begin. 

However, AFCA noted that the builder contacted the insurer on November 23, saying they had been waiting for the claimant to complete maintenance work to start repairs. 

The insurer then said it had “relied on an incorrect roof report” relating to another property when accepting the claim and was in the process of updating its decision on what it would cover. Claim notes showed that Hollard had been in possession of the correct report since August 2.  

AFCA says it had not heard anything further from Hollard since December 7 regarding its decision but the insurer texted the complainant in February this year to say the claim was closed. 

The ruling criticised the insurer for failing to provide evidence to show the roof damage was not covered, and for not informing the complainant that she needed to conduct maintenance repairs to allow for works to begin.  

AFCA says Hollard’s poor handling caused the claim to extend for an “unreasonable amount of time” and noted its failures to communicate and “provide adequate information in support of its position”. 

“This claim is still not finalised some 12 months after the claim was initially submitted and the basis of the insurer’s position remains unclear,” AFCA said.

“This is an extraordinary amount of time for a claim which, initially, should have been straightforward to process.

“Had the insurer properly reviewed the roofer’s report in April 2022 and before the May 2 acceptance, it would have identified it had the wrong report.

“Had it done so, and rectified this error in the following 24 hours, I am satisfied the insurer should have been in a position to have all the relevant information available to it by May 2 2022.” 

It says errors made by the insurer throughout the claim denied the complainant opportunities to prevent further damage to her property, which it has sustained since the initial claim. 

The ruling required Hollard to meet its obligations for the claim, including the repairs to rectify the damage to the roof. 

It also awarded the complainant $4400 for non-financial losses for its delayed and “dismissive” response to the claim, which caused stress for the homeowner. 

“The insurer has been disengaged and indifferent to its obligations toward the complainant,” AFCA said. 

“Having represented it would meet the costs of all the claimed repairs and creating the impression this would be done, I am satisfied it is fair in the circumstances of this complaint it be required to make good on that representation.” 

Click here for the ruling.