A complainant whose claim for fire damage at his home went through “unreasonable” delays and took eight months to settle, causing him and his wife stress plus other mental health conditions, has won his dispute with QBE.

The Australian Financial Complaints Authority (AFCA) ruled the insurer must pay the man $2750 in non-financial loss compensation for the duress suffered.

In his complaint to AFCA, the man said he was not satisfied with the way the insurer handled the claim after it was lodged in May last year.

While the claim was eventually processed and settled, he says delays and errors during the process as well as poor communication from QBE took a toll on the couple's health.

The claim was settled after the complaint was lodged, with QBE assessing the insured property to be a total loss and the parties agreeing to a settlement amount.

According to details contained in the AFCA ruling, there were delays in arranging temporary lodging for the couple and ensuring basic necessities like water and electricity were available.

During the assessment stage of the claim, there were delays and failures too in getting consultants to attend appointments or inspect the damage at the insured property.

There were poor communications and failures when it came to responding to reasonable questions from the complainant within reasonable timeframes.

AFCA says the available information shows the insurer’s management of the claim was not to the level reasonably expected from a financial firm, especially in the circumstances relevant to this complaint.

As a result, the complainant and his wife suffered undue stress, anxiety and inconvenience.

“This is especially noting the insurer was informed quite early in the life of the claim of mental health issues experienced and the impact the fire event and associated loss had already had on the complainant and his wife,” AFCA says.

“It is clear from the information that arising from the complainant’s experience and level of service received there was a lack of trust and a breakdown in the relationship between the parties.”

AFCA says it accepts the complainant and his wife’s conduct and interaction with QBE contributed to the difficulties faced in the management of the claim.

But in light of the loss the couple has suffered, AFCA says the “added poor experience under the claim was [a] significant factor for their loss of trust and confidence in the insurer.”

“Given the circumstances of the claim and the complainants, I believe the insurer could and should have taken more care in the management of the various aspects of the claim,” AFCA says.

AFCA says it did not agree with QBE that the claim had been managed in a “reasonable manner” and that it was not responsible for any failures or delays that arose.

“The failures and poor level of service caused the policyholders to suffer an unusual degree or extent of physical inconvenience, stress, anxiety and interference with their expectation of enjoyment or peace of mind,” AFCA says.

QBE had apologised to the complainant for the level of service that didn’t meet expectations and offered to pay $2000 in compensation on a without prejudice basis.

Click here for the ruling.