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Determination
Case number | 12-00-1036343 |
Financial firm | Aon Risk Services Australia Limited |
Case number: 12-00-1036343 27 August 2024
The complainant held a farm insurance policy with an insurer, who is not a party to this complaint. The complainant arranged this insurance through the financial firm (broker).
The complainant previously lodged an AFCA complaint against the insurer (968350) which was resolved by the complainant accepting AFCA’s Preliminary Assessment in September 2023. Given the insurer is not a party to this complaint and the matters between the insurer and the complainant have already been resolved, they will not be considered as part of this complaint.
The complainant says that the broker misled him to believe that tree removal works at the property would be covered by the insurer. The complainant has submitted two quotes which he says the broker should reimburse him for, totalling $24,587.20.
The broker denies that it misled the complainant.
No, the broker did not mislead the complainant. The broker provided the complainant with a copy of his insurance policy. The terms and conditions of the policy were clear. After the complainant made enquiries on the claim, the broker contacted the insurer about the complainant’s queries and then conveyed the information provided by the insurer back to the complainant.
The outcome is fair because the broker did not mislead the complainant and therefore, should not be held liable for any loss.
This determination is in favour of the broker. The broker is not required to take any further action.
No, the broker did not mislead the complainant. The broker provided the complainant with a copy of his insurance policy. The terms and conditions of the policy were clear. After the complainant made enquiries on the claim, the broker contacted the insurer about the complainant’s queries and then conveyed the information provided by the insurer back to the complainant.
The policy the complainant held with the insurer covers loss or damage caused by a storm and impact damage from trees.
For home building, the policy does not cover:
The complainant sought the amount of $24,587.20 from the insurer in complaint 968350. That matter was resolved on the basis that the insurer was not liable for the additional amounts because:
As indicated above, given that matter has been resolved, I cannot consider it further. I can only consider the broker’s actions and if the broker misled the complainant into believing additional costs for tree removal and earthworks would be covered by the insurer.
A broker must not engage in misleading or deceptive conduct. For AFCA to award compensation for misleading conduct, a complainant must show:
Conduct can be doing or saying something. It can also be not doing or not saying something. It can also be a pattern of behaviour over time.
If we find that the complainant was misled, we will consider how much worse off they are because they relied on the misrepresentation and require the broker to compensate them for that loss.
The complainant says the broker misled him during a conversation on about 1 December 2023 when it provided him with a direction to complete make safe works at the property under the assumption that the contractors would be paid for by the insurer. He says the direction was not limited – he was told to carry out make safe works and take additional photos.
Following this, on 13 December 2022, the complainant emailed the broker providing copies of two invoices for the works carried out, being:
Although the complainant resolved his dispute with the insurer under the previous complaint by agreement, the complainant is now seeking the cost of these invoices on the basis that it was the broker, not the insurer, who provided incorrect information which he relied upon to his detriment.
The broker says it did not mislead the complainant.
It is not in dispute that the broker provided the complainant with the policy wording and terms and conditions of his policy on 20 December 2021 and 14 December 2022, via email.
After a storm occurred that caused damage, the complainant made a claim with the insurer through the broker.
On 23 November 2022, the complainant emailed the broker as follows:
Dear S,
Just letting you know that we still do not have power to our residence at…
Damage to our property is significant.
I want to make sure I have the correct understanding in regards to the trees that have caused damage. The areas are unsafe to access and I do not want to put persons, including ourselves and person attending the property to do quotes, put at risk by limbs currently hanging.
I have read our policy and believe that these can be removed as the tree is what has caused the damage…
Following this, the broker sought clarification from the insurer by calling it on 1 December 2024. The contact notes from the insurer says:
Following review of a call between [insurer] and the broker on 1/12/2022, we note that authority was given by [the insurer] to remove dangerous hanging limbs as part of a make safe with the provision that photos were taken of the tree limbs being removed. As further documentation to substantiate these costs has not been provided, this has been factored into the settlement amount for item 2. If the insured has further documentation in regards to this we request they be submitted to the loss adjuster for review.
Calls between the broker and the complainant were not recorded. However, the broker says it simply conveyed the information from the insurer (as reflected in the above contact notes) to the complainant.
As indicated above, the complainant submitted invoices to the insurer (through the broker) on 13 December 2022. The complainant was informed by the insurer that he would not be reimbursed because the works performed were not covered by the terms and conditions of the policy.
The broker emailed the insurer on 21 December 2022 saying:
I phoned [the insurer] the day that the assessor was appointed to discuss this claim and the dangerous situation that the property was in with storm damaged trees and I was advised to inform our client to ensure the property is “made safe” but to take extra photos for substantiation. I passed this information on to our client and he subsequently arranged for the removal of dangerous limbs/trees. Please note that the electrician who had been engaged to do the initial work to reinstate the power supply to the property (before [electricity provider] would sign off on the work), had refused to enter the property until this was completed due to the extremely perilous situation.
Our client has now been informed by the assessor that this “make safe” work is not covered – surely this would be considered make safe as the alternative would be a risk of loss of life due to either electrocution or being struck by a falling tree or limb?
The complainant says the broker engaged in misleading and deceptive conduct on 1 December 2023 and he relied upon the information the broker gave to him to his detriment. This is because he arranged for the contractors to attend his property and remove all hanging tree limbs so that the property was safe.
I acknowledge the complaint has completed the works to remove trees as he believed this would be covered under the policy. However, the correspondence provided states that the complainant was to have the works documented and no correspondence shows that the broker advised the complainant the greater scope of works would have been covered under the policy. The complainant has not been prejudiced by any information provided to him by the broker, who simply relayed information from the insurer. The broker did not make a statement or engage in conduct that was misleading and deceptive, simply by conveying this information. If the information provided was incorrect, it is not the broker’s fault for simply conveying what the insurer said.
As an alternative, even if the information was misleading (which I do not accept), it is unclear that the complainant has suffered any loss. This is on the basis that the complainant acknowledges that he would have had to carry out the works anyway given he acknowledges it is his responsibility under the policy to make the property safe.
The complainant says further that his policy with the insurer requires that he takes all reasonable steps to reduce the loss of damage and prevent further loss. I accept this is what the policy says. However, I do not accept that makes the broker liable for any loss suffered. The complainant would have had to undertake the works at the property in any event if they were not covered under the policy (as was the case here). Further, if he believes the policy responds, then the broker cannot be liable for that loss just because the insurer has refused to agree.
Ultimately, AFCA has an overarching duty to do what is fair in all circumstances. Our approaches are designed to ensure that the outcome of any decision does not produce an unfair or unjust outcome. It would not be fair to require the broker to be responsible for the further costs incurred as they have relayed information provided by insurer. I am satisfied that there is no available information which supports the complainant‘s argument that the broker advised that the further works would be covered under the policy.
The outcome is fair because the broker did not mislead the complainant and therefore, should not be held liable for any loss.
The complainant conducted make safe works at the property that were not covered under the policy he held with the insurer. The broker only conveyed information provided by the insurer to the complainant. The complainant has not been prejudiced by any information provided to him by the broker. Regardless of what the policy says, the complainant would have had to conduct make safe works at the property in any event. Even if the broker conveyed information from the insurer that was incorrect, it is not the broker’s fault because the broker conveyed what the insurer told it. On that basis, the broker should not be held liable.
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.
