A property owner has won a water leak payout after challenging his insurer’s assertion that his leased site was unoccupied for more than 20 months.

The landlord lodged a claim for damage and loss of rent in October 2023 after discovering water ingress issues with several parts of the rural property.

He had leased the site to a bank since 2019, and a real estate agent managed the tenancy. In December 2021, the bank closed its branch but left its ATMs operational at the front of the property.  

Insurer QBE argued the property had been vacant since the branch shut and was therefore “unoccupied”. It said its policy did not respond to escape of liquid if a property was unoccupied more than 90 days.  

But the owner said it was unfair to consider the building unoccupied, because the bank’s property manager regularly attended for maintenance purposes and there had been seven visits during October 2023 by the bank’s service technicians and security contractors.  

QBE said it did not consider the visits “occupancy”. It noted the owner’s real estate agent conducted “vacant building property checks” every three weeks.  

The insurer’s policy considered a property unoccupied if “left vacant by you or any other authorised person whether furniture or other contents remain or not”.  

In a dispute ruling, the Australian Financial Complaints Authority notes a difference in the interpretation of unoccupied across residential and business properties, with businesses requiring “varying degrees of human occupancy”.  

It says, given the property was insured under a business pack, the onus was on the insurer to “specify minimum ongoing human presence if it sought to limit its cover on that basis, but it did not do so”. 

AFCA notes the lease allowed the bank continued access to the property, to operate the ATMs. 

It also accepts that the agent’s routine checks did not indicate the property was vacant but rather that the business required “limited human attendance”.  

“[The property] had not been left vacant by the insured or the bank’s staff or contractors, but was occupied by the bank’s business,” the authority said.

“The information shows the bank’s staff and/or contractors attended the property seven times during October 2023 to keep the ATMs operational.

“The insurer has not shown any period of more than 90 consecutive days when the bank’s service technicians/contracted security staff did not occupy the property for some period.” 

QBE is required it to settle the claim within the terms of the policy.  

Click here for the ruling.