A homeowner will not be covered for damage to his 40-year-old pool after an Australian Financial Complaints Authority panel decided that the proximate cause of the structure’s collapse was deterioration over time.

The complainant lodged a claim under his home and contents policy on March 16 last year, after a storm impacted his home a few days earlier.

He said the storm caused the unused and empty pool’s southern cement wall to collapse and supplied the panel with a video that appeared to show the collapse occurring during the event.

Commonwealth Insurance declined the man’s claim after an assessment from an appointed engineer concluded that the damage was the result of prolonged corrosion of the pool’s steel support posts.

The engineer said the corrosion was caused by long-term moisture penetration through the pool’s reinforced concrete bond beams and not by a “one-off event,” referring to the storm.

An engineer’s report provided by the claimant said the collapse occurred because the pool could not discharge excess stormwater trapped around its southern section.

The report admitted that the pool had suffered pre-existing deterioration, including corroded steel posts, but said it would have been impossible for the homeowner to be aware of these issues because they were not easily detectable.

AFCA sided with the insurer, saying both of the engineer’s reports corroborated that the pool had pre-existing damage that affected its structural integrity and likely contributed to its collapse.

The complainant argued that section 46 of the Insurance Contracts Act 1984 (Cth) should be applied to prevent the insurer from denying the claim. The section restricts an insurer’s ability to rely on exclusions for defects that the policyholder is unaware of.

AFCA acknowledged that the complainant could not have been reasonably aware of the issue when he purchased the home in 2020 but said section 46 did not apply in this matter because the pool’s corrosion was attributed to gradual deterioration rather than a defect from the pool’s original construction.

In one of its correspondences with the claimant, Commonwealth Insurance offered to contribute $3000 for the homeowner to obtain an independent causation report, which he later provided to the AFCA panel.

The panel said this information contributed to its ruling and required the insurer to pay the complainant $3000 for the professional costs of the engineer’s report.

Click here for the full ruling.