A homeowner who stripped out her bathroom before lodging a claim for a water leak has lost a dispute with her insurer.

Hollard declined the home insurance claim because the bathroom had already been gutted and re-waterproofed when its building inspector visited. 

“The insurer says this impacted its ability to accurately assess the cause of the damage. I agree,” an Australian Financial Complaints Authority ombudsman said. “There is no persuasive evidence to establish the nature and source of the leak.”

The homeowner said she had a communication issue due to a language barrier, and Hollard did not provide guidance and took about four days to assess the claim.

AFCA says the insurer did not err in its handling of the claim.

“I do not accept the insurer attending four days after the claim’s lodgement is unreasonable,” its ombudsman said. “I am satisfied the insurer assessed the loss in a timely manner.”

The homeowner provided a video showing water leaking into a wall cavity, but AFCA says she failed to establish the damage was caused by an insured sudden leak.

The policy covers loss or damage from the sudden and unexpected escape of liquid from specified items. An insurer-appointed builder said the damage stemmed from long-term maintenance issues in the bathroom, and noted cupping to the flooring in the hallway, dining room and lounge.

He was unable to establish the exact cause of the damage because the bathroom was stripped before inspection, but pressure testing showed no current leaks.

The homeowner was unable to obtain a report from tradesmen who repaired the leak.

“I accept the video shows there was a water leak at the property. However, there is no persuasive evidence to establish the source, nature, duration or volume of the leak,” AFCA’s ruling says.

“While the complainant suggests a pipe was leaking, she has not provided sufficient evidence to substantiate this assertion.

“I consider the complainant’s argument to be speculative.”

The claimant’s argument that she prevented further damage by undertaking repairs has also been rejected.

“I do not accept the nature of the repairs conducted by the complainant were of a temporary nature to mitigate further damage but rather permanent rectification repairs.” 

See the ruling here.