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 Australian Prudential Regulation Authority (APRA) has recently taken decisive action to address escalating concerns within the commercial auto insurance sector. In response to widespread industry protests over substantial premium increases, APRA has implemented emergency regulations aimed at protecting independent transport operators and logistics enterprises from potential financial distress. - read more
As 2026 unfolds, Australian insurers are confronting a trio of pressing challenges that are reshaping the industry's landscape. According to insights from Gallagher Bassett's upcoming report, 'The Carrier Perspective: 2026 Claims Insights,' the foremost concerns include rising premium costs coupled with shrinking insurability, escalating cyber and data risks, and increasing difficulties in attracting and retaining skilled workers. - read more
Australia's transport industry is sounding the alarm over a significant and growing shortage of truck drivers, a situation that poses a substantial threat to the nation's supply chain. The National Road Transport Association (NatRoad) has highlighted that the current shortfall of approximately 28,000 drivers is projected to escalate to 78,000 unfilled positions by 2029, representing a 26% decrease from the current workforce of 189,900 drivers. - read more
The Australian Prudential Regulation Authority (APRA) has released a pivotal report highlighting the pressing need for immediate and substantial action to shield communities from the escalating impacts of extreme weather events. This Insurance Climate Vulnerability Assessment (ICVA) serves as a stress test, modelling potential future scenarios rather than forecasting specific outcomes. However, the risks outlined are already becoming evident, reinforcing the insurance industry's calls for urgent intervention to mitigate extreme weather risks. - read more
The Financial Advisers Association of Australia (FAAA) has recently voiced its opposition to proposed increases in professional indemnity (PI) insurance limits, cautioning that such changes could lead to significant cost burdens for financial advisers. In a submission to the Treasury's consultation on potential reforms to PI insurance within the financial services sector, the FAAA emphasised that reforms to the Compensation Scheme of Last Resort (CSLR) should take precedence over adjustments to minimum PI settings. - read more
The importance of life insurance in financial planning: Life insurance isn’t just a policy; it’s a cornerstone of comprehensive financial planning. By protecting your family’s financial future, life insurance offers peace of mind, knowing that your loved ones will be taken care of in the event of your untimely passing. It’s not solely about leaving behind a legacy, but also ensuring that your family can maintain their standard of living, pay off debts, and cover end-of-life expenses without financial burden. - read more
Shareholder agreements lay the cornerstone for stable business relationships and continuity in Australia. Acting as a contract among business owners, these agreements set forth the expectations, rights, and obligations of all parties involved. They are particularly vital in delineating clear paths for dispute resolution, succession planning, and the transfer of ownership shares under varied circumstances, including the untimely death or departure of a shareholder. - read more
Life insurance is a financial product designed to provide a safety net for your loved ones and business in the event of your passing. At its core, life insurance aims to deliver financial protection by paying out a lump sum or ongoing payments to a designated beneficiary upon the insured's death. - read more
Life insurance might not be at the forefront of your mind, especially when you're young and healthy. However, understanding the essence of life insurance early on can significantly impact your financial future and provide much-needed peace of mind. - read more
Estate planning is a process that involves the management and distribution of an individual's assets and responsibilities in the event of their passing or incapacitation. It is an essential part of financial planning that ensures your assets are managed according to your desires and your loved ones are taken care of. - read more
Knowledgebase
Insurance Premium: The periodic amount paid for the purchase of insurance.
