Insurer Penalized for Mishandling Storm Damage Claim
Insurer Penalized for Mishandling Storm Damage Claim
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
In a recent development, Auto & General has been instructed to both apologize and compensate a Brisbane property owner with a $2000 payment after an inadequate review of his storm damage claim led to an initial denial of coverage and subsequent policy cancellation.
The homeowner reported his damages following severe storms that hit in February 2022. The insurance company consulted a builder, referred to as PB, to evaluate the property damages.
PB's assessment claimed that the home had pre-existing damage and lacked waterproof integrity. Specific issues highlighted included clogged gutters, cracked and missing roof tiles, and an unconventional roofing method that permitted water intrusion.
According to PB, the storm did not directly damage the roof but worsened existing issues. This led Auto & General to deny the claim and revoke the policy in October 2022, accusing the homeowner of misrepresenting the property's condition as "good" when the policy began and during its renewal.
The homeowner contested the insurer’s stance, arguing that it was unjust. He presented a separate builder’s report, along with written statements and photographs, which demonstrated a lack of prior wall or ceiling damage.
The policyholder attributed the defects cited by PB to partial make-safe work, asserting that the gutters had been regularly maintained prior to the storm. He also mentioned the emergence of storm-induced mold in sections of his home.
While Auto & General did ultimately reverse its initial claim denial and arrange for a cash settlement the preceding October, the Australian Financial Complaints Authority (AFCA) has decreed that the company must retract its claims of disclosure breach and issue a formal apology.
The AFCA identified “multiple erroneous assertions by PB alleging the complainant had neglected to maintain the property appropriately before the storm,” for which the homeowner provided contradicting proof.
The authority’s ombudsman commented, "I am satisfied the complainant reasonably believed that his home was in good condition and waterproof at the time of policy renewal in July 2021. Moreover, I think a reasonable person would agree with the complainant’s evaluation of his home's condition."
They further stated, "I conclude that the complainant did not misrepresent the property's state. Thus, the insurer made a mistake in deciding to cancel the policy."
The insurer has been directed to pay $2000 to cover non-financial losses due to its oversight in investigating the homeowner’s challenges to PB’s report, failure to acknowledge present mould, and incomplete make-safe actions.
The AFCA concluded that Auto & General should have sought a second, independent evaluation of PB’s findings. The resultant protracted claim process subjected the policyholder and his family to undue stress and anxiety.
The original source of this matter was reported by the Insurance News.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Suncorp, a leading Australian insurer, has recently secured a substantial reinsurance agreement valued at AU$2.4 billion over a five-year period. This strategic move is designed to bolster the company's financial resilience and stability in the face of increasing natural hazard costs and a competitive insurance market. - read more
The Australian Prudential Regulation Authority (APRA) has recently imposed an additional AU$2 million capital requirement on Sovereign Insurance Australia (SIA). This decision comes in response to identified deficiencies in SIA's risk management framework and operational risk management practices. - read more
In a significant development for Australia's construction industry, Mecon, a specialist in construction insurance, has announced an increase in its underwriting capacity. Effective from March 10, 2026, Mecon now offers coverage up to $120 million for single projects under its material damage and public liability policy sections. This marks a substantial rise from the previous limit of $50 million. - read more
Mirabelle Underwriting, a specialist in construction and engineering insurance, has launched a new product tailored for renewable energy operations in Australia. This initiative, backed by Lloyd's capacity, aims to address the specific risks associated with the rapidly expanding renewable energy sector. - read more
The Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings against the Royal Automobile Club of Queensland (RACQ), alleging that the insurer disseminated more than 500,000 misleading insurance renewal notices to its customers. This action underscores the regulator's commitment to ensuring transparency and fairness within the insurance sector. - read more
In an age where digital presence intertwines with daily operations, the threat landscape in Australia has magnified, exposing businesses to an evolving array of cyber threats. From sophisticated phishing attempts to ransomware attacks, the risk of digital insecurity looms large. Australia, with its growing technological adoption, finds itself facing an upsurge in cyber threat incidents year over year. - read more
In the digital age, Australian small businesses find themselves navigating a world where online presence isn't just an advantage, it’s a necessity. With this increased online activity comes heightened vulnerability to cyber threats, making the protection of digital assets an urgent priority. - read more
Cyber risk management involves identifying, assessing, and prioritizing potential risks to an organization's digital assets and implementing measures to mitigate these threats. - read more
Remote work has seen a significant rise in Australia, especially following the COVID-19 pandemic. More businesses are embracing flexibility, allowing employees to work from home or other remote locations. - read more
Cyber threats refer to malicious acts that seek to damage data, steal information, or disrupt digital operations. These threats can come in various forms, such as malware, phishing attacks, ransomware, and more. - read more
Knowledgebase
Insurance Policy: Broadly, the entire written contract of insurance. More narrowly, the basic written or printed document, as distinguished from the forms and endorsements added thereto.
No comments yet. Be the first to share your thoughts.