A homeowner whose property was severely damaged following a “supercell thunderstorm” will be covered for her losses after winning a claims dispute against her insurer. 

The complainant lodged a claim in January last year after the storm significantly damaged several parts of the home and caused water ingress, which led to her kitchen ceiling collapsing. She also reported damage to ceilings in other rooms and said that the wooden floorboards had been swelling.

Hollard appointed a loss assessor, referred to as AG, who reported that the water ingress had been due to an overflow of the home’s rear gutter, which they said was full of debris. AG also noted that the building only had one downpipe across the rear gutter, which needed realignment.

The assessor said the damage was caused by factors that would be considered “maintenance issues”. They recommended the insurer to apply coverage at its own discretion, noting that the complainant had only recently moved in and was unaware of the issue.

Hollard declined the claim, saying that the policy excluded losses caused by design faults, wear and tear, or poor maintenance.

Following its decision to decline the claim, the insurer provided the claimant with a builder’s report, which backed the findings of the loss assessor. 

However, the Australian Financial Complaints Authority (AFCA) noted direct repetitions between AG’s and the builder’s reports. It said it could “only conclude” that AG had “copied and pasted” from the report when compiling its own findings.

AFCA also acknowledged that in March last year, the insurer sought further evidence about the potential damage of a storm of that severity. It said that the query, along with information in the claim file notes, showcased an “admission that the insurer lacked sufficient information to support its original decision”.

Hollard provided AFCA with further evidence in September last year and maintained that the damage would not have occurred if not for the maintenance issues.

The complainant engaged a construction expert, referred to as JB, who rebutted the insurer’s findings, saying there had been no evidence to show that water overflowed from the gutters into the wall cavity. 

JB said that the section of the roof tiles above the kitchen showed a notable depression and was a “probable source of the moisture to the ceiling in the event of heavy rain”.

The homeowner noted the property was able to withstand a significant storm that hit the area just a month before the claimed event. 

The claimant contended that the insurer’s experts had relied heavily on a single photograph of the gutter - in which it had been coated in mud and leaves - to determine that it had been “full of debris”. She said Hollard failed to establish “a direct causal connection between the downpipe and gutter design and the damage wrought by the storm”.

AFCA sided with the complainant, saying that the insurer placed “a great deal of reliance” on AG’s report despite evidence that showed it “reproduced, virtually without amendment, conclusions set out in the earlier NC report”.

It said that the reports from the insurer’s experts lacked appropriate “measurements, analyses, explanations, logic and validity”.

The ruling required Hollard to engage with a qualified expert to set up a scope of works to repair the property, commit to repairs and provide the homeowner with alternative accommodation if required.

AFCA also awarded the complainant $5400 for non-financial losses, the maximum amount possible under its jurisdiction.

It criticised Hollard’s claims handling and communication to the property owner, who had been in a “vulnerable” state due to several factors, including health issues impacting her immediate family, psychological difficulties, and English not being her first language.

The ruling highlighted an email correspondence from the complainant, in which she stressed that the claims handling was greatly impacting her and noted that the insurer had failed to respond to it.

“I accept the complainant in this matter has suffered an unusual degree of physical inconvenience and interference with her expectation of enjoyment and peace of mind,” AFCA said.

Click here for the ruling.