The complaints authority has told RAC Insurance it cannot decline a landlord’s break-in claim despite her failure to disclose the property was unoccupied.

The owner said the home had been put up for sale about the time of the loss in June last year. It had not been rented for at least a year before that.  

RAC Insurance said its landlord policy excluded properties that were unoccupied for more than 60 consecutive days.  

It defined unoccupied as being when “no one is eating, sleeping or living in the building as their usual place of residence”.  

But the woman said she lived in the house on occasions and it was never unoccupied for more than 15 days because she, her husband or her real estate agent regularly attended.

She said the lawns were kept tidy and the mailbox was regularly emptied, and that she could have two residences at once.  

The Australian Financial Complaints Authority says the house was not the woman’s home because it was insured as an investment property and was being sold. It says the home had been unoccupied for more than 60 days at the time of the loss, because it was no one’s usual residence.  

But it notes that section 54 of the Insurance Contracts Act (1984) states an insurer cannot refuse a claim unless it can show that a claimant’s act caused prejudice or was seen to be capable of causing or contributing to a loss.   

The authority says the homeowner failed to tell the insurer the property would be unoccupied for more than 60 days, but adds the insurer would, in some instances, agree to cover a home if informed it would be unoccupied.   

RAC Insurance said it would only have done so if the insured agreed to stop mail and any other deliveries, ensured grass and gardens were kept tidy, and had the building inspected inside and out at least once a week.  

AFCA says, based on the complainant’s evidence, she satisfied these requirements.   

The insurer said real estate photos from about October 2022 showed the property was vacant and unoccupied.  

But the authority does not accept the insurer has shown it would have refused cover and was prejudiced. 

“The insurer has not presented anything to refute the complainant’s evidence. For instance, there is nothing provided from the real estate agent or neighbours to say the property was not occupied or used in the manner submitted.”  

Click here for the ruling.