You’re offline. This is a read only version of the page.
Determination
Case number | 12-00-1026872 |
Financial firm | Strata Community Insurance Agencies Pty Ltd |
Case number: 12-00-1026872 30 September 2024
The complainant is the owner of one of the lots (units) insured under a residential strata insurance policy (policy) issued by the financial firm (insurer). On 14 September 2023, a claim was lodged for water damage to the insured unit due to a failed dishwasher hose, said to have occurred on 19 April 2023.
The insurer has declined the claim. It says the complainant has failed to show the loss and damage claimed triggers cover under the policy. Alternatively, the insurer says the loss and damage is excluded from cover in line with the policy exclusions specified in the product disclosure statement (PDS).
The complainant disputes the insurer’s decision. She says the insurer has not established the proximate cause for the loss and damage, and therefore, it has not established an entitlement to decline the claim.
Yes. The exchanged information supports the insurer’s decision to rely on the policy exclusions to decline the claim. It would be unfair to require the insurer to accept the claim in circumstances where the policy clearly excludes such loss and damage.
The outcome is fair because it is based on the information provided by and relied on by the parties to the complaint. It would be unfair to require the insurer to accept to cover loss and damage that is clearly excluded under the policy.
This determination is in favour of the insurer.
The insurer is entitled to decline the claim and is not required to take any further action.
Yes. The exchanged information supports the insurer’s decision to rely on the policy exclusions to decline the claim. It would be unfair to require the insurer to accept the claim in circumstances where the policy clearly excludes such loss and damage.
The policy covers the insured property against accidental loss or damage
The insurer provided the complainant with the relevant policy documentation including the PDS and certificate of insurance (COI). I accept the insurer is entitled to rely on the policy provisions to assess its liability under the claim.
The policy covers the insured property against accidental loss or damage. Cover under the policy is subject to the conditions, limitations and exclusions specified in the PDS.
The complainant needs to show damage triggers cover under the policy
The complainant is first required to show, it is more likely than not (most likely), that the loss or damage claimed triggers cover under the policy. Only if the complainant can do this, will the duty 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 the insured property against loss or damage, which means physical loss or, destruction of, or damage to property from any sudden and accidental cause not otherwise excluded by the policy. The policy does not define the term accidental and so it is fair to accept its ordinary meaning, which is accepted to mean unexpected and unforeseen.
The insurer says the complainant has not been able to show the damage claimed triggers cover under the policy. Alternatively, the insurer says if it is accepted that the loss and damage triggers cover under the policy, such cover is subject to the policy exclusions. The policy, amongst other things, excludes from cover loss or damage caused by vermin, mice, rats, termites or other insects, wear, tear and gradual deterioration.
Having considered all the exchanged material, I am of the view it is fair to accept the complainant has established loss and damage that triggers cover under the policy. I am satisfied the available information supports the water damage is due to a sudden, unexpected and unforeseen event.
There is no information which can reasonably be accepted to show the complainant was or could have been aware of the damage to the dishwasher hose occurring before it failed. Further, there is no persuasive information from the insurer to show whether the damage was caused gradually over an extended period or whether it may have been caused over a short period e.g. overnight.
I accept it is fair to accept the complainant has shown loss or damage that triggers cover under the policy. The onus rests with the insurer to show an entitlement to decline the claim in line with the policy or otherwise.
On lodgement of the claim the complainant provided a tax invoice from plumbing consultant ‘D’ dated 19 April 2023. D was the plumber who attended the insured property to investigate the cause for the escape of water event and repair the damaged dishwasher hose. In its tax invoice D says it appeared that the dishwasher hose had been chewed by a rodent and recommended that this be further investigated.
I note the complainant has provided an amended version of this tax invoice which does not include D’s opinion that the damage to the hose appeared to have been caused by a rodent. However, in an email dated 27 September 2023 from D to the insurer, D explained that it removed reference to the rodent damage at the request of the complainant.
Further, D said that it was possible that the damage to the hose was due to either a rodent chewing on it or through constant scraping of the hose over time through the access hole each time the dishwasher was in use.
The insurer appointed consultant ‘B’ to investigate the cause and extent of the damage. B in its report dated 31 October 2023 says:
I acknowledge the complainant disputes the above experts’ opinions and says that they are only assumptions. However, the complainant has not provided any persuasive information to the contrary and relies on her opinion that the damage is not consistent with rodent damage.
I accept there is reference to the hose being damaged due to ongoing long-term scraping whilst the dishwasher was in use. However, I find the reasons provided by B against this being the most likely cause of the damage compelling, especially in the absence of any persuasive information to the contrary.
I am satisfied, without evidence to contrary, it is fair that the insurer be permitted to rely on the opinion’s provided by the appointed consultants. I am also satisfied that the available opinions and supporting information (photos) support the opinions of D and B. This being that it is most likely the damage to the hose is due to chewing by rodents.
The PDS clearly provides that loss or damage caused by vermin, mice, rats, termites or other insects is excluded from cover. Given the above, I am of the view it would be unfair to require the insurer to accept the claim when the policy excludes such loss or damage from cover.
The insurer is entitled to decline the claim and is not required to take any further action.
The outcome is fair because it is based on the information provided by and relied on by the parties to the complaint. It would be unfair to require the insurer to accept the to cover loss and damage that is clearly excluded under the policy.
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 the information the parties have provided.
While the parties have raised several 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.
