Homeowners win rainwater damage dispute

Complainants’ rainwater damage claim approved after contesting insurer’s policy exclusions.

Last July, the property owners filed a claim due to water entering the home through a gap in roof capping, resulting in damage to their roof truss, ceiling, and carpet.

The claimants attribute the lifting of the capping and the resulting water entry to a storm with strong winds and heavy rain.

While Allianz’s assessment acknowledged that water entered from the capping, they contested that the damage was not caused by a one-off event but rather attributed it to wear and tear and a lack of maintenance.

The insurer cited unsealed flashing joins on the roof as a contributing factor to the capping lifting, leading to their application of policy exclusions for wear and tear.

Furthermore, the insurer utilized exclusions related to a lack of maintenance, structural defects, and corrosion to reject the claim.

The Australian Financial Complaints Authority (AFCA) remained unconvinced that the findings in the insurer’s report justified a valid application of the exclusions.

The Australian Financial Complaints Authority (AFCA) highlights that Allianz’s report merely identified unsealed flashing joins on the roof as a potential factor that “may have contributed to the damage” but failed to offer any explanation of how this could have caused the lifting of the roof capping.

According to AFCA, the insurer’s claims regarding a “lack of maintenance” causing the opening were unsubstantiated, and there was “no supporting information” for the exclusions related to defects and corrosion.

AFCA stated that the gap, measuring a few millimeters, is positioned near the roof’s edge, adjacent to a several-meter drop.

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The insurer failed to provide an explanation regarding the maintenance that could be considered fair and reasonable for the complainants to undertake in such circumstances.

The ruling also challenges the assessment of the claimant-appointed expert, expressing dissatisfaction with the lack of sufficient explanation on how heavy winds could have caused or contributed to the movement of the roof capping.

However, the crucial aspect of the claim revolved around rainwater damage to the building, which was undisputed by both parties.

AFCA stated that the policy does not necessitate rainwater to come from a storm event or be unusually heavy, making it relevant to the claim.

Allianz contends that the opening in the roof capping was not caused by a storm, thus asserting that it cannot be considered a covered event under the policy.

AFCA argues that a reasonable interpretation of the policy’s language regarding the term “opening” pertains to items that are deliberately placed and can be opened or closed, typically.

AFCA asserted that the gap in the roof capping is not an intentionally placed opening in the building, and it is not designed to be opened or closed.

“I am unconvinced that a reasonable interpretation of ‘other opening’ would encompass openings like the gap in the roof capping,” AFCA stated.

Therefore, I am not satisfied with the insurer’s demonstration of the applicability of the specific exclusion in the ‘storm, cyclone, rainwater, or run-off’ insured event.

According to the ruling, Allianz is required to cover the building damage based on actionable quotes and implement a 15% uplift if they decide to cash-settle the claim.

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Source : insurancenews.com.au