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Determination
Case number | 12-00-1030541 |
Financial firm | AAI Limited |
Case number: 12-00-1030541 9 August 2024
The complainant holds a home insurance policy with the financial firm (insurer). He lodged a claim under the legal liability section of the policy after receiving a letter of demand from his neighbour for an injury alleged to have been caused by his dog.
The insurer declined the claim because it says the incident did not occur at the insured address.
The complainant says the cause of the incident was the defective boundary fence that allowed the dog to enter the neighbour’s property. He also says the incident occurred on his property.
Yes. The legal liability section of the policy only responds if the incident occurred at the insured address. I cannot be satisfied, on balance, the incident occurred at the insured address. The insurer is therefore entitled to decline the claim.
Whilst I acknowledge the complainant’s concerns regarding the neighbour’s statements and his submissions regarding the condition of the fence, I do not consider these submissions change the outcome. The policy is clear and unambiguous regarding when the insurer will cover a legal liability claim. I am satisfied the policy does not respond in the circumstances. It is therefore fair for the insurer to decline the claim.
This determination is in favour of the insurer.
The insurer is entitled to decline the claim.
Yes. The legal liability section of the policy only responds if the incident occurred at the insured address. I cannot be satisfied, on balance, the incident occurred at the insured address. The insurer is therefore entitled to decline the claim.
It is accepted insurance law that the complainant carries the initial onus to establish, on the balance of probabilities (that is, more likely than not), a loss which is covered by the terms and conditions of the policy.
Only if the complainant can do this, will the onus shift to the insurer to show, on balance, it is entitled to decline cover in line with the policy wording or otherwise.
The policy covers legal liability in certain circumstances. The relevant section of the product disclosure statement (PDS) states:
We cover your legal liability to pay compensation for death of or bodily injury to other people, or loss or damage to their property, resulting from an incident which happens during the period of insurance:
• in connection with you owning or living in the building; and
• at the insured address.
We also cover you for associated legal costs to defend a claim against you that is covered. We need to first agree to pay the legal costs before they are covered.
To establish cover for legal liability under this section of the policy, the complainant is required to show, on balance, the incident occurred in connection with him owning or living in the building, and that it occurred at the insured address.
Both the insurer and complainant provided information to support the circumstances of the incident.
The complainant says the incident occurred due to the fence being rotten on the neighbour’s side and he was unaware of its condition. He says the neighbour alleges that on or about 21 April 2023, his partner’s dog entered the neighbour’s property, killed several of her chickens and then bit her on the hand. The neighbour issued a Notice of Claim seeking damages for personal injury. The complainant wants the insurer to accept the claim under the legal liability section of the policy.
The neighbour’s Notice of Claim includes a description of the incident, which supports that the alleged injury occurred at the neighbour’s property as follows: ‘I was attacked in my back yard by a dangerous dog’.
There is also a statutory declaration from the neighbour, which says:
There is also a council report from when its investigator attended the property on or about 22 April 2023. This supports the neighbour’s description of the incident that it occurred on the neighbour’s property.
The insurer says the policy does not provide cover in this case as the complainant has failed to meet the legal liability criteria to show the incident occurred at the insured address.
The complainant says the incident could have occurred on his property because:
The complainant says the incident occurred due to a faulty boundary fence and he should be covered in these circumstances. He says the proximate cause of the incident is the failure of the fence and if the fence did not fail then the dog bite incident would not have occurred.
I do not agree with the complainant’s submission. The information shows the dog was able to access the neighbour’s property through the fence. However, this does not bring the incident within the scope of cover. The information shows, on balance, the dog went into the neighbour’s yard due to the chickens being in the yard and bit the neighbour whilst in their yard.
As outlined above, to establish cover for legal liability under the policy, the complainant is required to show the incident occurred at the insured address. This must be shown on the balance of probabilities. I am not satisfied there is sufficient information to show the incident occurred on the complainant’s property, being the insured address noted on the policy documents. There appears to be no dispute there were no witnesses to the incident, only the neighbour. The neighbour’s statement, including the statutory declaration, is supported by the council report. There is insufficient information to dispute her version of events. I therefore cannot be satisfied, on balance, the incident occurred at the insured address.
As the complainant has not established cover under the legal liability section of the policy, it is fair for the insurer to decline the claim.
Whilst I acknowledge the complainant’s concerns regarding the neighbour’s statements and his submissions regarding the condition of the fence, I do not consider these submissions change the outcome. The policy is clear and unambiguous regarding when the insurer will cover a legal liability claim. I am satisfied the policy does not respond in the circumstances. It is therefore fair for the insurer to decline the claim.
AFCA has determined this complaint based on what is fair in all the circumstances, having regard to:
The respective parties have completed a full exchange of the relevant information, and each party has had the opportunity to address any issues raised. We have reviewed and considered all of the information the parties have provided.
While the parties have raised a number of issues in their submissions, we have restricted this determination to the issues that are relevant to the outcome.
AFCA is not a court of law. We do not have the power to take or test evidence on oath, or to require third parties to give evidence.
When we assess complaints, we consider:
We give more weight to documents created at the time the events occurred. If there are no relevant documents, we will decide what most likely occurred based on the available information.
If there are conflicting recollections and these are evenly weighted, we may find that a claim cannot be established.
