An Australian Financial Complaints Authority (AFCA) panel has required Suncorp to complete repairs to a vulnerable claimant’s home after the insurer proposed a cash settlement due to unsafe work conditions stemming from the homeowner’s aggressive behaviour.

The complainant lodged the claim in March last year after floodwaters up to 1.8m inundated sections of his property.

Suncorp agreed to cover the damage following assessments from its builder, referred to as KB, but required a complete strip-out of the building before it could arrange a scope of work. 

KB appointed an asbestos removal subcontractor to complete the strip-out on June 14. But issues arose when the insured raised concerns about the works after noticing white powder and dust throughout the lower section of the home.

The insurer’s assessor, referred to as DC, said the works were “unacceptable”, saying the traders “failed to complete the task assigned to them in a safe and orderly manner”.

Suncorp accepted that the works had contaminated the home but declined to continue its repairs after alleging the complainant “consistently maintained aggressive and threatening behaviour” and presented a safety concern.

The insurer says the homeowner had been verbally aggressive, physically threatening, and, during one visit, attempted to strike a contractor. 

Suncorp says it was entitled to cash settle the claim if members of its supplier network could not complete repairs, in accordance with policy terms. 

The claimant accepted that he had been frustrated with the insurer and was “justifiably angry” with the contractors due to their faulty work but denied that he physically assaulted the worker, instead saying he grabbed house keys off them and demanded they leave the site.

The man, who is over 70 and suffers from an acquired brain injury (ABI) that causes significant cognitive and physical issues, says he would be incapable of co-ordinating the repairs himself and sought for the insurer to complete them. 

AFCA acknowledged that Suncorp has a safety obligation to its workers and agreed the complainant used inappropriate language during recorded conversations with the insurer. 

But the panel cast doubts on the alleged assault, saying that the insurer did not properly investigate the matter to conclude that the man was a threat to the safety of the workers. 

“No evidence has been provided to show that the insurer spoke to the trade in question, requested any incident reports, interviewed the complainant or otherwise took steps to investigate the allegation,” AFCA said.

“Similarly, the assertion that the complainant raised his fists to staff has not been particularised in any detail and no first-hand evidence in support has been provided.

“The internal email dated June 20 confirms that the insurer knew that the complainant had a different version of events, but this would not change the insurer’s view that he may be verbally/physically aggressive again, such that it would pursue a cash settlement.”

AFCA also notes that the insurer did not flag the complainant as a vulnerable customer, despite being informed of his ABI, and failed to take any steps to account for his disability in its claims handling.

“Without condoning the complainant’s established inappropriate language, the panel considers he had reasonable grounds to be frustrated given the insurer’s poor claim handling and delays, the asbestos contamination and the false safety clearance,” AFCA said.

“Noting his ABI, the panel is satisfied that these issues more likely than not acted as a trigger for the conduct.

“In the circumstances, the panel is not satisfied it is reasonable for the insurer to cash settle the claim.”

The ruling required Suncorp to arrange repairs for the claimed damage and the asbestos remediation, which would be paid directly from the insurer rather than under the policy. 

AFCA says the two parties “must work together” to ensure the repairs are completed. It required Suncorp to appoint a dedicated claims manager with experience dealing with disabled customers, and the complainant to have a representative to act on his behalf for interactions with the insurer.

The panel ordered the insurer to reimburse the policyholder for legal costs, totalling $2566, after the man engaged lawyers to assist him in dealing with the insurer.

It also awarded the homeowner $5400 for non-financial losses, the maximum amount, after accepting Suncorp’s handling of the claim “caused major stress and inconvenience”.

“The complainant says that the insurer’s delays and poor claim handling has meant he has, in effect, been homeless for more than 12 months,” AFCA said.

“He also refers to KB’s negligent contamination of his home with asbestos then providing an incorrect safety clearance, which meant his family could have been exposed to asbestos.

“Based on the exchanged information, it is clear the insurer failed to meet its claim handling, complaint handling and communication obligations under the [General Insurance Code of Practice].”

Click here for the ruling.