A property owner’s storm damage claim will not be paid after a dispute resolution panel ruled the likely cause of the loss was a flood that happened before he bought a policy.  

The complainant lodged his claim on July 12 2022, reporting damage to a retaining wall, which also affected his tennis court, poolside deck, pathways and a light.

He said the damage occurred in the two weeks before the claim, caused by heavy rain and earth movements.

The claimant held a policy that covered storm and rain, which was purchased on May 17 2022. He also had optional flood cover.

Insurer Auto & General challenged the insured’s assessment, noting Bureau of Meteorology data showed limited rain on the dates of the alleged event. The highest recorded single-day rainfall was on July 2, at 28mm.  

The insurer appointed a builder to inspect the property in August 2022. The builder could not identify the cause of the damage but said it had probably been ongoing for about two to six months.

Auto & General also engaged engineers, referred to as JHA, who reported the rain event was “not sufficient” to cause the loss.

JHA’s report noted the area had considerable rainfall earlier in the year, with upwards of 719mm recorded between February 27 and March 4 2022.

The report included comparison images from January 24 and May 29 that showed the tennis court fence had begun to fall out of alignment and was caving. Further images from June showed a misalignment of the poolside deck.

JHA did not provide an exact date for the deterioration but said it had “gradually developed” following the flood in February. “It is highly improbable for the damage to have occurred due to the minor rain event in July with such low rainfall, when far higher previous rainfalls had not resulted in the damage,” the engineers said.

The complainant agreed the property was flooded in February but said that caused only “superficial” damage to the pathway and did not affect the retaining wall, tennis court fence or light pole.  

The Australian Financial Complaints Authority panel has backed the insurer’s assessment of the claim.  

“While the panel accepts that the damage may have become evident to the complainant during the period of insurance, the available information does not show the proximate cause (dominant cause) of the damage was heavy rainfall in or about July 2022,” the panel said.  

“The analysis in the JHA report is consistent with the photographs provided by the complainant, the Nearmap images and the [weather bureau] data. The engineer providing the report is appropriately qualified to assess and analyse the information.” 

Auto & General has agreed to pay the complainant $2500 for delays attributed to its decision to engage with the engineers.

See the ruling here.