A homeowner who discovered a large pit on his property will not be reimbursed for damage after the hole was found to have been a decommissioned well.

The 4.5m-deep hole opened up beneath pavers about 1.5m from the man’s home in August 2022.

He lodged a claim with QBE, which sent workers out to fence off the area. 

The insured argued the pit was a sinkhole caused by a leaking pipe. He said he saw water flowing at the bottom of the hole and that a leak of water or other liquids had caused further soil erosion at its head. 

QBE appointed a forensic structural engineer, who provided three reports on the pit and engaged with a plumber to conduct tests.

The engineer found the pit was caused by a well that had been decommissioned more than 50 years before the home was built, as confirmed by neighbours.

The reports said the well’s capping had deteriorated, which explained why water had been found at the bottom.

The engineer tested nearby sewer and stormwater pipes and found the amount of water entering the hole had not changed. A sewer pipe was leaking but that was about 19m away from the pit.

No connection was found between the well capping deterioration and a sewer leak. The plumber supported the engineer’s findings, noting no pipe network was near enough to have created a sinkhole. 

In a dispute ruling, the Australian Financial Complaints Authority accepts the insurer’s evidence shows no claimable loss. 

“The expert evidence shows that the pit is a disused well that was decommissioned before the complainant’s house was constructed,” it said. “Despite numerous tests, the expert evidence shows no connection between the broken sewer pipe, or any other leak, and existence of the pit, water at the base of the pit or erosion at the head of the pit.”

QBE acknowledged it damaged the complainant’s timber deck during its work and has agreed to pay the homeowner $1122.

AFCA’s ruling also requires the insurer to pay $1500 to compensate for delays in its response, noting it took more than six months to make its claim decision.

Click here for the ruling.