A property owner will have her home insurance policy reinstated after the complaints authority overturned her insurer’s decision to deny a claim based on misrepresentation of the house’s condition.  

The woman lodged a claim after fire destroyed her unoccupied investment property, but Suncorp declined cover and cancelled the policy, alleging she did not accurately report the home’s condition when she last renewed the policy in October 2022. 

Suncorp said the property had several broken windows, was missing its front stairs and had a “known squatter problem”. 

It said the owner had been repeatedly told by the local council to mow the lawns and clean the property.

The insurer relied on correspondence from the claimant to the council in which she stated the property had an “ongoing problem with strangers entering the property and ransacking the place”. 

Suncorp said it renewed the policy on the understanding the home was “in good condition and well maintained” and that no trespassers or squatters were occupying it. It said it would not have underwritten the home if it had been aware of the issues.

The owners, who are pensioners, said they had been experiencing “some financial difficulties” that affected their ability to maintain the home properly, but said they continued to attend to the house.  

The Australian Financial Complaints Authority accepts the property had been broken into but says this does not mean the woman breached the policy terms. It says the policy did not reference home invasions or illegal use by trespassers, but rather emphasised whether anyone was staying at the property unapproved. 

“The reference in the [product disclosure statement] is for the complainant to notify the insurer if ‘trespassers or squatters occupy the insured address,” the authority’s ombudsman said. “I consider the reference to occupation can reasonably be interpreted as illegal tenancy, rather than isolated incursions (which might result in a claim). There is no persuasive evidence of illegal tenancy or squatting.”  

The ombudsman says the insured tried to stop the break-ins by installing security devices, notifying police and erecting signs to warn people away from the home.  

AFCA also says there is “no persuasive evidence” the home was in poor condition when the policy was renewed.   

“While there were some recent incidents involving possible damage, it is not clear when these incidents occurred ... (or when the complainant became aware of them). Given this, I am not satisfied the insurer has shown it had grounds to deny the claim or cancel the policy.  

“The insurer is required to reinstate the policy, effective from 2022. It is required to ascertain the extent of the loss and settle the complainant in accordance with the terms and conditions of cover as it was in 2023.”  

Click here for the ruling.