A Queensland homeowner who sought cover after their home’s electric cables were damaged by lightning has won his claims dispute following an Australian Financial Complaints Authority (AFCA) decision. 

The complainant lodged a claim on May 13 last year after the electrical conduit was found to have been severely damaged, disrupting the home’s power supply.

A carpenter who was working on the property on May 7 said that he observed a “huge lightning strike” hit the property’s chimney and that when he returned the next day, there had been no power at the home. 

Allianz Australia declined the claim, saying there had been limited evidence to indicate that a lightning strike occurred near the home, and attributed the likely cause of the cables damage to water or movement from roots, which was not covered by the policy. 

The insurer’s assessor, who inspected the property a few days after the claim was made, says there had been no evidence to show an entry or exit point of the lightning strike in the chimney. 

The assessor noted that the insured had engaged an electrical contractor and location specialists who had dug multiple pits and a large trench, and a report did not rule out man-made error as a potential cause for the damage. 

Allianz Australia also highlighted that based on an Australian lightning incident archive search (LIAS), the nearest lightning strike occurred about 1.9km from the location on May 7. 

However, the insured obtained a report from a weather service, referred to as MW, that acknowledged the potential for errors in the lightning identification system that could miscalculate the precise locations of lightning strikes by up to 2km.  

MW says the LIAS report and as well as Bureau of Meteorology confirmation report were “supportive of lightning occurring... particularly if there were eyewitness reports that align with the time that the closest strikes were occurring”. 

The complainant also provided findings from several experts who identified consistencies with the reported damage to the effects of a lightning strike. 

“The Consumer Mains appear to have been subject to a lightning strike which has severely compromised the insulation of the cables in a number of locations along the length of the service,” an electrician, referred to as BH, said. 

BH also notes that the mains were not reparable and must be replaced.  

AFCA acknowledged the insurer’s findings which disputed the eyewitness statements that the chimney had been struck by lightning but says that based on the provided reports, the carpenters likely did observe a strike close to the property on May 7.  

“[The eyewitness’] mistake as to what was actually struck does not preclude, on balance, from accepting they experienced a very close strike,” AFCA said. 

“Whilst it has not been stated that there was power to the premises at that time, I am satisfied that it is likely there was and that when the carpenters returned the next day, they discovered that the power was out.” 

The ruling challenged the insurer’s view that there had not been a lightning strike “within 1.2km of the premises,” noting that a Locate and Detection Specialist provided photos that observed a loss signal within a metre of the house. 

AFCA also referred to MW’s findings which raised the possibility of errors with the exact preciseness of the LIAS’s location of the storm. 

“Given all the information that has been provided, I am now satisfied that it is likely that there was a lightning strike very close to the premises considering all the information and the eyewitness report,” AFCA said. 

“In the circumstances I am satisfied that the tree roots did not cause the damage to the conduit and note that the conduit when breached would still have wires which were insulated within it.
“Nothing has been provided that shows that they would not have continued to provide the insulation required.” 

The decision observed that there had been disputes between Allianz and the complainant’s experts on the appropriate compensation. The insurer notes that the complainant’s quote had included an upgrade of its consumer mains two-phase power that it says was “not required”, which AFCA agreed with. 

AFCA mandated that Allianz pay for the sum of a generator’s connection and detection services, which had been $2596 and $1386, respectively. 

It also required the insurer to cover the cost of repairs to the two-phase system and the replacement of any appliances and equipment damaged by the strike based on payment sums provided by the claimant.

Click here for the ruling.