Complainants whose home had been damaged by rainwater will have their claim paid after successfully challenging their insurer’s decision to apply several policy exclusions.

The property owners lodged a claim in July last year after water entered the home through a gap in roof capping, causing damage to their roof truss, ceiling and carpet.

The claimants attribute wind and heavy rain from a storm as factors behind the lifting of the capping and the resulting water entry. 

Allianz’s assessment agreed that water entered from the capping, but it did not accept the damage was due to a one-off event, instead saying it was due to wear and tear and a lack of maintenance.

The insurer notes unsealed flashing joins on the roof as a contributing factor to the lifting of the capping in its application of the policy exclusion of wear and tear. It also applied exclusions relating to a lack of maintenance, structural defects and corrosion to the claim denial.

But the Australian Financial Complaints Authority (AFCA) was not convinced that the findings in the insurer’s report provided information to warrant a valid application of the exclusions. 

It notes that Allianz’s report only identified unsealed flashing joins on the roof as a component that “may have contributed to the damage” but did not provide any explanation as to how this would have caused the roof capping to lift.

AFCA says that the insurer’s suggestions that the opening was due to a “lack of maintenance” were not proven and that there had been “no information to support” exclusions relating to defects and corrosion. 

“The gap is a few millimetres in size and is located near the edge of the roof next to a drop of several metres,” AFCA said.

“The insurer has not explained what maintenance the complainants could fairly and reasonably have been expected to complete in the circumstances.”

The ruling also disputes the claimant-appointed expert’s assessment of the event, saying it was “not satisfied there is sufficient explanation of how heavy winds could have caused (or did cause) the roof capping to move”. 

But it says the pertinent matter for the claim related to rainwater damaging the building, which was not in dispute by either party.

“Relevantly, the policy does not require rainwater to come from a storm event or be unusually heavy,” AFCA said.

Allianz argues that a storm had not caused the opening in the roof capping and, therefore, could not be interpreted as an opening coverable by the policy.

But AFCA says a fair interpretation of the policy’s language on the word “opening” refers to items that are “intentionally placed and (typically) can be opened or closed”. 

“The gap in the roof capping is not an opening intentionally placed in a building and it cannot be opened or closed,” AFCA said.

“I am not satisfied a fair interpretation of ‘other opening’ would include openings such as the gap in the roof capping.

“Therefore, I am not satisfied the insurer has shown the specific exclusion in the ‘storm, cyclone, rainwater or run-off’ insured event applies.”

The ruling required Allianz to cover the damage to the building based on actionable quotes and apply a 15% uplift should it cash-settle the claim.

Click here for the ruling.