A homeowner has been awarded substantial compensation after a boulder collapsed from a sandstone rockface at the back of his house, causing damage to the property.

Westpac, which insured the man, had offered a goodwill payment of $5000 and two weeks accommodation but the Australian Financial Complaints Authority (AFCA) ruled it should accept the man’s claim and make a payout of around six figures.

The homeowner received a phone call from his wife during a storm in spring 2018 and was told a large rock or boulder had collapsed. It damaged the external cladding to the rear of the property, the garage rear wall and a wall in a bedroom.

He lodged a claim under his Westpac building and contents policy, saying the boulder fell as a result of a storm event. Storm damage was covered under his insurance policy.

Westpac appointed a structural engineer who said the collapse was not due to an insurable event as the rockface had weakened over a period of many years. Westpac declined the man’s claim but offered to assist with the cost of engaging a geotechnical engineer to begin the investigation and stabilisation process, and temporary accommodation.

The homeowner took the dispute to AFCA, requesting the claim be paid in full with out of pocket expenses.

AFCA said the case was “complex” but ruled Westpac was not entitled to deny the claim because the dominant cause of the damage was the storm event.

“The failure was probably due to a sudden loss of capacity in the rock mass which was contemporaneous with the rainfall event,” it said. “The panel is not satisfied the loss was caused by or resulted from gradual deterioration.

“This determination is partly in favour of the complainant.”

Westpac was told to pay $81,732 for cost of repairs to the insured home, $6630 to remove debris and $2500 in compensation, totalling $90,862. It should also reimburse the man for the cost of props he had fitted to stabilise the area, pay interest on the prop costs, and cover the cost of geotechnical engineer reports up to $5000.

“Compensation is warranted because there has been an unusual degree of physical inconvenience and time taken to resolve the complaint which would have caused distress to the man,” AFCA said.

However, AFCA accepted Westpac was entitled to deny rectification of the rock face - something the man was seeking - as this was not an emergency repair or protection covered by the policy. Westpac had said retaining or anchoring of the sandstone rocks to reinforce or stabilise a sandstone wall would be a significant upgrade to the property and “betterment,” which the policy did not cover.

The man was covered for loss or damage caused by storm, including cyclone, hail, wind, snow or rain under the ‘storm’ insured event. An exclusion applied for loss or damage resulting from gradual deterioration from rain and in relation to damage caused or arising from earth or soil movement including landslide, subsidence or erosion.

Engineer reports gave conflicting opinions about the cause of the rockfall and ensuing damage but AFCA concluded the “dominant or operative cause” was the storm event accompanied by rain.

“The exclusion applies if the cause was normal earth movement. This is not the case here. The cause of the rockfall which caused the damage was the storm event. That is, the proximate cause is not normal earth movement. Westpac is not entitled to decline the claim,” AFCA said.

See the full ruling here.