Property owners in central NSW, who claimed that their extensively damaged home was covered under their policy’s tsunami benefit, have been unsuccessful in their claims dispute.
The claimants submitted their claim, alleging that their home and neighboring properties in a nearby town were devastated by “two fast-flowing waves of stormwater” on the early morning of November 14 last year.
While IAG acknowledged the severe damage to the property and the local community, they rejected the claim on the basis that the damage resulted from flood/rainwater run-off, which fell outside the coverage provided by the policy.
According to a report from a technical assessor appointed by the insurer, the waves of water were attributed to heavy rainfall the previous night, with an estimated 120mm recorded within a short timeframe.
Based on the assessor’s findings, it was determined that the water, along with mud, persisted on the property for more than 12 hours. The report concluded that there was no evidence of storm-related “top-down” inundation. Furthermore, the assessment deemed the home as a complete loss.
The claimants did not present any evidence to challenge the expert’s conclusions and acknowledged that their policy did not include coverage for floodwater damage.
However, they contended that a storm was responsible for the water damage and argued that the policy, which encompassed tsunami and storm, should cover the resulting losses.
The AFCA panel determined that the tsunami cover was not applicable to the present case.
The panel acknowledged that although the policy did not provide an explicit definition of tsunami, they interpreted it based on the definition from the Macquarie dictionary.
AFCA concluded that the distance between the complainant’s property in central NSW was too significant for the waves to have been caused by seawater. They supported the insurer’s assessment that the waves were a result of excessive rainwater run-off, which had flowed over the ground.
According to AFCA, “The panel acknowledges that the event leading to the damage cannot be accurately labeled as a tsunami, as the evidence indicates that the water responsible for the damage was rainwater, not seawater.”
“The panel expresses understanding and sympathy for the complainants due to the significant loss they have experienced. However, since the cause of the damage, which is rainwater run-off, is not covered under the policy, it is reasonable for the insurer to deny the claim.”
Source : insurancenews.com.au
