CGU Insurance says it has sorted out the customer dispute that made unwelcome newspaper headlines last week. Spokesman Jo Weeks told Sunrise Exchange News an administrative error left a Melbourne couple technically uninsured because they owed a token 1 cent on a housing insurance policy that came free with their home loan.

The customers learned of the problem only when they made a claim on a collapsed roof.

Ms Weeks says CGU sent out bills of 1 cent on the policy schedule to help computer systems cope with the six-year-old home loan promotion. There are probably plenty of questions attached to why the system couldn’t cope with a situation where the cost of postage and paper exceeds the account; but Ms Weeks says there was never any question that the claim wouldn’t be dealt with. There was never a risk the home would not be covered.

“We had a builder on-site to assess the damage and provide assistance within one hour of the claim being lodged,” she said.

It was later determined that the collapse was a result of faulty workmanship, and the builder has since taken responsibility. Ms Weeks says CGU will be happy to assist if the claim against the builder falls through.

She says CGU has offered the free insurance promotion with Aussie Home Loans for six years. This is the first time the 1 cent bill has caused problems, and the company is looking into ways of handling the issue differently.