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.
The National Heavy Vehicle Regulator’s latest focus on agricultural heavy vehicle safety is a timely reminder for farm, livestock, grain and regional freight operators: safety standards are not just a compliance issue. They can also shape claims outcomes, business interruption, liability exposure and future access to affordable truck insurance. - read more
Lithium-ion batteries are now part of everyday trade work. They power cordless tools, site lighting, testing equipment, drones, portable power stations and, for some electricians and solar installers, the systems being installed for customers. A fresh insurance industry analysis has again highlighted why this technology is not just a convenience issue, but a serious risk management issue for businesses. - read more
Australia’s life insurance sector has renewed its push for consumers to receive simpler help with the cover they already hold, particularly through superannuation. The Council of Australian Life Insurers has again argued that many people need clearer, more accessible guidance about insurance inside super, including death, disability and, where available, income protection insurance. - read more
A new Australian Financial Complaints Authority decision has offered an important reminder for anyone relying on income protection insurance through work or super: once benefits have been paid, an insurer generally needs a strong and clearly evidenced basis before asking for that money back. - read more
Australia’s latest marine incident figures are a timely reminder that good boating is not only about enjoying time on the water; it is also about managing risk before something goes wrong. The 2025 Marine Incident Annual Report, highlighted by Marine Business News, examined incidents involving domestic commercial vessels, foreign-flagged vessels and regulated Australian vessels operating in Australian waters. - read more
Plant and equipment insurance is a specific type of policy designed to protect the tools, machinery, and equipment that businesses rely on for their operations. This insurance safeguards against various risks, ensuring that your essential assets are not a financial burden during unforeseen circumstances. - read more
Understanding plant and equipment insurance is crucial for any contractor in Australia. This type of insurance protects your valuable machinery and tools from unforeseen events that could disrupt your business. Without proper coverage, equipment damage or loss can lead to significant financial strain, potentially jeopardizing your operations. - read more
Plant and equipment insurance is a specialized form of coverage designed to protect the tools and machinery that businesses rely on for their operations. This type of insurance typically covers various assets, including construction machinery, agricultural equipment, and industrial tools. By safeguarding these critical assets, you can ensure that your business continues to run smoothly even in the event of loss or damage. - read more
When it comes to running a small business, particularly in sectors like construction, having the right insurance is essential. This is where plant and equipment insurance comes into play. It protects your valuable machinery and tools, allowing you to focus on your projects without the constant worry of potential financial loss. - read more
In the bustling world of business, safeguarding your assets is crucial. This is especially true for industries reliant on machinery and equipment. One essential type of coverage for such businesses is plant and equipment insurance. It provides financial protection against risks associated with the loss or damage of your essential tools. - read more
Knowledgebase
Insurance broker: An agent acting on behalf of the insured (not the insurance company) who negotiates the terms and cover provided by the insurer in the insurance policy.
No comments yet. Be the first to share your thoughts.