The Australian Financial Complaints Authority (AFCA) has determined it is not the responsibility of an insurance provider to ensure customers with little fluency in English understand the wording of policies.

The issue arose in the case of a Polish homeowner who lost an attempt to have QBE pay half the cost of rebuilding his property after he blamed wind, not termites, for the collapse of his roof.

AFCA determined it was not the responsibility of QBE to ensure the complainant understood the wording of its policy, which had an exclusion for damage from insects. QBE had already refunded almost a decade of insurance premiums to the customer, whose wife had died a month earlier.

“This is a very sad set of circumstances. The insurer has provided an ex gratia payment to the complainant but is not required pay him under the terms and conditions of the policy,” AFCA ruled.

It was not “reasonable or practical” to expect QBE should ensure the policy wording was read or understood, or that it should follow up on this with its customers, the ruling says, noting the first page of the policy advised using an interpreter “if you cannot read and understand English”.

The homeowner held an accidental damage home and contents policy with QBE for a timber frame house and lodged a claim after the roof above the kitchen and living area partially collapsed in July 2018. He initially suggested strong winds, and later falling trees and rocks being thrown at the house, may have caused the collapse.

A building consultant determined it was due to an infestation of white ants, or termites, over a period of several years which would have been impossible not to notice. Chipboard wall panels were totally destroyed by termites.

Advocates for the homeowner had argued QBE was negligent in not ensuring the complainant understood the contents of the policy.

“I am sympathetic to the complainant, however, do not accept this argument,” AFCA said. “If the complainant was not sure what the PDS (Product Disclosure Statement) said he has had ample time, since 2008, to obtain assistance in this regard.”

The State Administrative Tribunal ruled the house be demolished. Staff from St John Ambulance had earlier reported concerns about the stability of the ceiling and significant damage to the timber walls, roof framing and timber lining but the widower said he had been acting as a full-time carer for his wife and had been too preoccupied to worry about the condition of the house.

“I do not accept that a level of termite infestation severe enough to cause a roof collapse would not have been noticed by the complainant,” the AFCA ruling says.

“The PDS wording is clear in stating it will not pay for any loss or damage which is caused directly or indirectly by vermin, birds or insects."

Even had the complainant taken steps to eradicate the termites, any damage that had been caused would have been excluded under the policy, AFCA said, concluding that QBE “is not liable to contribute towards any rebuilding costs”.