The financial services ombudsman has told Hollard to increase its payout to a homeowner after it failed to adequately fix his mould-contaminated property following a previous dispute. 

The complainant said repairs completed by the insurer in May 2023 left several rooms still contaminated.  

He referred to an expert report showing mould growth on the property’s upper level due to “moisture migration” from wet materials on the ground floor.  

He also appointed a mycologist who visited in August 2023 and found fungal spore concentrations upstairs and downstairs, including in the insulation and air-conditioning unit.  

A second report from the mycologist, two months later, found high fungal spore concentrations in the walls of a bedroom and bathroom.  

The mycologist said the property should not be considered remediated.  

Hollard argued the home was repaired appropriately and the complainant’s findings could not be relied upon because the assessments were made six to 10 weeks after its expert, referred to as WEC, certified the mould repairs were successful.

It suggested the mould detected in the complainant’s reports was unrelated to the claimed event and caused by cross-contamination from the complainant’s pets and tradespeople.  

The insurer said its appointed occupational hygienist acknowledged that some items needed to be cleaned but found the property “suitable for occupancy at the present time”.  

An Australian Financial Complaints Authority panel says WEC’s findings lacked “detailed information on the samples collected and the results based on those samples”, noting they were based on airborne mould testing and for general locations only.  

It says the complainant-appointed experts backed up each other’s findings, which were “based on more detailed assessments”.  

The panel says Hollard’s position that mould re-emerged for non-claimable reasons “contradicts the insurer’s own expert reports, which have attempted to discredit findings of mould at the premises”.

The authority says it is “satisfied the exchanged information demonstrates the insurer has not adequately remediated the mould at the insured property. It is likely the inadequate containment and the time taken to remediate the mould resulted in it spreading to the upstairs area of the property.”

The panel notes the relationship between Hollard and the customer has broken down and a cash settlement after a further scope of works, with a 15% contingency increase, is fair.  

The insurer must also provide alternative accommodation while the property is unliveable, compensate the homeowner for damage caused by its workers, and cover his expert costs.  

Hollard has also been ordered to pay compensation of $2500 for failing to fix the mould issue and $2900 for not implementing the previous AFCA dispute decision.  

See the ruling here.