A broker has helped deliver a claim dispute win for their client after challenging her insurer’s suggestion that a shade cloth was the primary cause of storm damage to her pergola.  

Insurer Blue Zebra did not contend that the pergola was damaged, but argued the installation of the shade sail was not compliant with building standards.  

An insurer-appointed builder found wind damaged the cloth, and that the cloth constituted a “defect which allows the structure to be susceptible to movement and racking forces”.

Blue Zebra said the local council confirmed the pergola did not meet compliance standards because of an unapproved shade sail. And it referred to section 54 of the Insurance Contracts Act, saying it permitted it to exclude loss caused by a “defect, structural fault, poor or faulty design specification, materials, planning or workmanship”.

The complainant, represented by her broker, said the pergola was appropriately constructed, noting the council had issued a Certificate of Final Inspection for it in June 2015.  

She said previous owners installed the structure, including the shade cloth, which was removable. The insurer said the woman installed the cloth.  

In its dispute ruling, the Australian Financial Complaints Authority says it is not satisfied the shade cloth was a defect or structural fault, and it is not convinced the complainant would have been “reasonably aware” the cloth could have affected the pergola’s structural integrity.  

“There is no dispute that the shade cloth has been caught in the wind,” an AFCA ombudsman said.

“However, there is no persuasive evidence that the material, layout or the operating mechanism of the shade cloth has contributed or exacerbated the damage.

“Equally, I accept there is no persuasive evidence the complainant was aware that the installation of the shade cloth is either a defect or a structure fault for the purpose of the policy.”  

The complainant’s initial quote for costs to replace the pergola was $22,150; this was later updated to $32,380.

Blue Zebra said the sum was unfair because the timber frame was not damaged and could be used in the reconstruction.  

However, AFCA says the insurer provided no evidence the existing beams could be reused. It says the pergola needs replacing and the claim should be settled for the quoted amount.

It has also awarded $2000 compensation, noting the insurer “unreasonably and continuously changed the basis of the claim denial”.

“The insurer continued to introduce unsubstantiated arguments, hindering the progress of the claim in a timely manner. I accept this added unnecessary confusion and frustration to the complainant.”

Click here for the ruling.

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