Homeowner Faces Setback in Sinkhole Saga

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.

The deep pit, which measured 4.5 meters, appeared beneath pavers just 1.5 meters away from the house in August 2022.

The homeowner contacted QBE insurance to lodge a claim, prompting the insurer to send a team to cordon off the affected area for safety.

The homeowner argued that the pit had been formed by a leaking pipe and believed the visible water flow at the bottom was evidence of such. He suggested that the water leak had caused soil erosion, exacerbating the formation of the pit.

In response, QBE appointed a forensic structural engineer to investigate. The engineer, assisted by a plumber, conducted several tests and authored three reports on their findings.

The investigation concluded that the pit resulted from the collapse of a well capping that had been in place for over five decades, predating the home's construction according to the neighborhood residents' accounts.

According to the engineer, the old well capping had eroded over time, explaining the presence of water at the base. Nearby sewer and stormwater pipes were examined, and it was found that water flow into the pit had been consistent. A sewer pipe leakage, identified approximately 19 meters from the pit, was determined to be too far away to contribute to its formation.

No legal or physical connection was determined to link the sewer leakage or any nearby pipes to the well's deterioration. The plumber validated the engineer's conclusions, confirming a lack of nearby pipe networks capable of forming a sinkhole.

The Australian Financial Complaints Authority (AFCA) later ruled in favor of QBE, citing comprehensive evidence provided by the engineer. The findings firmly established that the pit was a disused well, lacking any evident links to a leaking sewer or other leaks.

AFCA endorsed, "The expert evidence substantiates that the pit originates from a long-decommissioned well existing before the complainant’s house was built. Despite extensive testing, the results indicate no connection between any pipe leaks and the pit’s formation, the water at its base, or the erosion observed."

Though QBE did agree to compensate for incidental damages done during the examination process, including $1122 for the damage to the homeowner’s timber deck and an additional $1500 for the delays in processing the claim, which took over six months.

This case, initially reported by insurancenews.com.au, underscores the critical role of thorough expert investigation to differentiate between naturally occurring subsidence and structural failures caused by other factors.

Published:Wednesday, 10th Jul 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Clear

Western Australia's Transport Sector Pushes for Enhanced Truck Licensing Standards

17 Mar 2026: Paige Estritori

Western Australia's transport industry is urging the state government to implement more stringent heavy vehicle licensing requirements, aiming to bolster road safety and ensure drivers possess adequate experience. This initiative follows South Australia's recent reforms, which introduced tougher conditions for truck drivers after a tragic triple fatality in 2024. - read more

Aon's 2026 Report Highlights Escalating Climate Risks for Australian Businesses

17 Mar 2026: Paige Estritori

Aon plc, a leading global professional services firm, has released its 2026 Climate and Catastrophe Insight report, shedding light on the escalating climate-related risks facing Australian businesses. The report indicates that insured catastrophe losses in Australia totaled an estimated US$2.9 billion in 2025, underscoring the growing financial impact of climate events on the insurance sector. - read more

Navigating Rising Premiums and Cybersecurity Risks in Australia's Insurance Sector

16 Mar 2026: Paige Estritori

As we progress through 2026, Australia's insurance industry is grappling with significant challenges that are reshaping the landscape for both insurers and policyholders. Two primary concerns have emerged at the forefront: the affordability of premiums and the escalating threat of cyber incidents. - read more

Introducing Backd: Affordable Insurance for Casual and Contract Workers

15 Mar 2026: Paige Estritori

In a significant move to address the insurance needs of Australia's growing casual and contract workforce, TAL has partnered with global insurtech company Cover Genius to launch Backd. This innovative digital-only insurance product aims to provide accessible and affordable life and income protection coverage to workers who have traditionally faced challenges in obtaining such protection. - read more

Zurich's Home Loan Protection: Tailored Insurance for Mortgage Holders

15 Mar 2026: Paige Estritori

Zurich has unveiled its Home Loan Protection (HLP) product, a new insurance offering that combines life and income protection benefits tailored specifically for mortgage holders. This innovative cover automatically adjusts its premiums as the insured's mortgage balance decreases, ensuring that policyholders are only paying for the coverage they need. - read more

Click for more Insurance News