A Hollard customer who insisted his landlord insurance policy covered for loss of rental income caused by the stench of a dead possum has lost his dispute with the insurer.

He had made a claim for $3110, including $2752 for lost rental after tenants who were scheduled to stay at the holiday property in January last year moved to another location because of the odour.

The man says the loss was caused by “impact damage” and that it fell within the terms of the policy since it provides for “impact damage”. He says the term extends to insured events involving an animal.

But the Australian Financial Complaints Authority (AFCA) disagreed, saying the meaning of the term refers to other impacts such as from a falling tree, space debris or aircraft.

“[The complainant] considers the ‘impact’ caused by the dead possum’s odour led to the loss,” AFCA says in its ruling. “I do not consider the loss falls under this insured event.

“Whilst I accept an ‘impact’ does not necessarily need to be from a physical strike, I am satisfied the intent of the policy is that this is necessary for there to be cover.”

AFCA says the loss suffered by the customer, including the $358 he paid a contractor to clean up the stench, is best described as “accidental damage” as defined by the policy terms: sudden, unexpected and unintentional loss or damage.

Accidental damage is an optional cover that the man had taken up but as it excludes loss or damage caused by or arising from animals, the loss is not covered.

“I accept a possum is an animal and the claimed loss arose from its death and the odour infiltration of the home,” AFCA said.

Hollard had argued “accidental damage” does not apply as as the presence of the possum was known to the complainant and his property agent. The insurer says they knew the possum was entering the property and tried to trap it inside.

Click here for the ruling.