An Allianz home and contents policyholder has won a claim dispute after her property was inundated. 

Allianz has not established the policy’s flood exclusion applies and must accept and settle the claim, the Australian Financial Complaints Authority says. 

AFCA says it is unclear whether the water was overflow from a creek one kilometre to the property’s northwest, which would be flood and excluded, or pooled to the west and flowed onto the property as “rainwater and run-off”, which was covered by the policy. 

“There is no conclusive evidence that the creek overflowed before the complainant’s property was inundated,” the authority’s determination said. “There is evidence that the water came from the north, which is consistent with flooding. However, there is also evidence that the water came from the west, which is more consistent with run-off.” 

Water pooled on the property on November 12 2022 after months of heavy rain and the claimant awoke about 3am on November 14 to find it entering her home. She lodged a claim with the insurer that day. 

An Allianz-appointed hydrologist inspected the property on December 13 and reported it was inundated by water from the creek. The rainfall recorded over short periods was not rare or extreme and would not have been enough to be the cause, the report said.  

The hydrologist said a nearby town was flooded by the creek, but the policyholder said that was about nine kilometres southwest of her property and “no evidence of flow velocity has been provided”. 

A letter from the local council about a year after the event said “any hydrological report provided to you by third parties should be considered unreliable” as modelling was complex and incomplete.  

It told the claimant: “Your property was inundated by overland flow ... Over 100mm of rain was recorded in the upper catchment, which has generated significant volumes of fast-moving water.” 

Maintenance near the woman’s property was later required “due to the movement of water from west to east across the road, evidenced by the significant depositions of material within the travelling stock reserve”, the letter said. 

Allianz did not comment on that letter or ask the hydrologist to review it, AFCA says. 

A supplementary report from the hydrologist in June last year said debris indicated water had flowed south over the land. 

But a loss adjuster’s report from two days after the inundation said debris indicated the water came from the west, as the complainant insisted.  

AFCA says the hydrologist provided inconsistent information on where the creek broke its banks, with a January 2023 report identifying a 90-degree bend and a June 2023 report saying  there were several breakout locations about 600m from the bend. In September, the hydrologist indicated a breakout next to a bridge. 

The authority also says the hydrologist’s observation that “several rainfall events in the months prior resulted in saturated catchment conditions” suggests the rain on November 14 2022 could not be absorbed, so it pooled and flowed overland. 

The policyholder also sought compensation for the way the claim was handled, but AFCA says Allianz’s hydrologist had the necessary qualifications and the insurer’s decision was reasonable based on the information it had.  

See the ruling here.