A complainant who insured antique furniture for up to $50,000 has lost a dispute after his insurer valued the items, which were ruined by a water leak, at just $9700.

The policyholder lodged a claim in August 2021 after a burst pipe in his laundry caused significant damage to the property, including three pieces of antique furniture, which were insured under a special contents benefit. 

The claimant says he purchased the items – which included a four-door sideboard, a two-door sideboard, and a glass cabinet – from Italy more than 30 years ago for $US35,000 ($55,017) and argues that the items' value exceeds the $50,000 sum insured. 

Suncorp deemed the furniture unrepairable and agreed to pay $9700 following a valuer’s assessment.

The claimant challenged Suncorp’s offer by providing quotes from a furniture retailer, referred to as DOM, based on items that he says are similar to his damaged furniture. These quotes added up to $55,269 to $57,798.

DOM also stated that the damaged furniture “would be impossible to source in today’s market” and proposed replacing the items with custom-made items, costing between $70,000 and $80,000.

But the Australian Financial Complaints Authority (AFCA) says the items on which DOM's quote was based are “not a reliable indicator of the value of the complainant’s furniture,” noting differences in size, shape, colour and style. 

“The replacement furniture proposed by DOM is very different to the complainant’s furniture,” AFCA said.

“They look much bulkier and heavier, and lighter in colour. They have a matte appearance, whereas the complainant’s furniture is covered in glossy veneers.”

AFCA also noted issues with the insurer’s provided market examples, saying that the items looked similar in size and shape but carried a “much simpler, less decorated finish”.

It says given the lack of market examples, the furniture could not be considered to be worth more than Suncorp's offer of $9700.

“These valuations are the best available evidence of the value of the complainant’s furniture,” AFCA said.

“The complainant does not accept these valuations, but he has not provided a persuasive alternative valuation.” 

AFCA acknowledged that the policy insured the items for “up to $50,000” but says the insurer was only required to pay that amount if the furniture was “actually worth $50,000 or more before they were damaged”. 

“The COI says each item is covered ‘up to’ the sum insured,” AFCA said.

“This means the insurer will not pay more than the sum insured for each item but may pay less.”

AFCA accepted that the lower value of the items meant the insured had paid higher premiums to cover the “special contents” benefit. It says the items would have been covered without the extra benefit and required Suncorp to refund any additional premium that had been applied.

Click here for the ruling.