Methane leak payouts unlikely
The insurance industry is likely to find itself dragged into the case of a Melbourne suburb that is sitting on leaking methane gas. While most policies aren’t likely to cover affected homeowners, future legal action against local authorities will probably see claims being made.
Residents of the Brookland Greens estate in the south of Melbourne are considering legal action against the local authorities that operate the neighbouring landfill site, which has been a source of constant complaints since homes were built there.
Last week the Country Fire Authority and Environment Protection Authority advised residents they may have to consider leaving their homes as the gas could cause explosions.
Brookland Greens Residents Association President Gordon Exner told insuranceNEWS.com.au residents are still trying to ascertain whether they will be covered by their insurance policy if they do move out but says it seems unlikely.
“The bigger issue for us is because of the media attention we are suddenly finding ourselves sitting in a very expensive scrambled egg,” he said. “Our properties are now worth nothing. We can’t move, and we can’t sell the property. We also don’t know if there is a legal liability if we do sell.”
Frankston broker Philip Mott told insuranceNEWS.com.au much will rely on whether a leak at a neighbouring plot of land is considered an insurable event.
“It’s a really difficult one,” he said. “It’s not like the premises have been destroyed, but they may be unfit to live in. There is also the question of whether they are even allowed to sell.”
The Insurance Council of Australia (ICA) is understood to be involved in briefings with the Victorian State Recovery Committee. ICA told insuranceNEWS.com.au most householders’ policies will not cover the event because they specifically exclude “impacts occurring outside of the property and in particular any issues of a geotechnical nature”.
Residents of the Brookland Greens estate in the south of Melbourne are considering legal action against the local authorities that operate the neighbouring landfill site, which has been a source of constant complaints since homes were built there.
Last week the Country Fire Authority and Environment Protection Authority advised residents they may have to consider leaving their homes as the gas could cause explosions.
Brookland Greens Residents Association President Gordon Exner told insuranceNEWS.com.au residents are still trying to ascertain whether they will be covered by their insurance policy if they do move out but says it seems unlikely.
“The bigger issue for us is because of the media attention we are suddenly finding ourselves sitting in a very expensive scrambled egg,” he said. “Our properties are now worth nothing. We can’t move, and we can’t sell the property. We also don’t know if there is a legal liability if we do sell.”
Frankston broker Philip Mott told insuranceNEWS.com.au much will rely on whether a leak at a neighbouring plot of land is considered an insurable event.
“It’s a really difficult one,” he said. “It’s not like the premises have been destroyed, but they may be unfit to live in. There is also the question of whether they are even allowed to sell.”
The Insurance Council of Australia (ICA) is understood to be involved in briefings with the Victorian State Recovery Committee. ICA told insuranceNEWS.com.au most householders’ policies will not cover the event because they specifically exclude “impacts occurring outside of the property and in particular any issues of a geotechnical nature”.