Insurer Ordered to Pay Full Claim for Confusing Patio Coverage

2

The complainant had argued that the storm-damaged items on the patio were enclosed enough to avoid the "open air" restriction, but the AFCA found the blinds in place did not ensure an enclosed space, lacking proper lockability. However, the authority noted the policy's language was not explicit in imposing the 10% limitation due to its placement under "additional benefits," which suggested the opposite of a restriction.

Moreover, the AFCA criticized the insurer for failing to present evidence that the policyholder neglected reasonable care of the items. In acknowledging the complainant's hardships, AFCA highlighted that the year-long exposure to mould had affected living conditions, despite the insurer disputing health impacts.

As part of the resolution, AFCA instructed a $4000 payment for non-financial losses, emphasizing that proof of health issues was unnecessary to confirm that the claimant's peace of mind had been compromised. The requirement for the insurer now includes engaging an expert for a comprehensive assessment of the storm and mould damage.

While the insurer can deduct the $1558 already issued as an ex-gratia payment and any policy excess, the decision underscores the necessity of precise and consumer-friendly contract wording to avoid customer disputes.

This case serves as a critical reminder for insurance companies to adopt straightforward language and place important limitations in unambiguous policy sections. As companies reassess contract terms, consumers might see increased clarity in coverage options, potentially averting future misunderstandings.

Published:Monday, 23rd Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

NSW Revisits CTP and Lifetime Care Schemes

02 Sep 2025: Paige Estritori

New South Wales (NSW) is undertaking a detailed review of its Compulsory Third Party (CTP) insurance scheme as well as its lifetime care and support system. The Standing Committee on Law and Justice of the state's upper house has initiated this examination as part of their routine practice conducted every parliamentary term. The last thorough assessment took place in 2022. - read more

AFCA Upholds Insurer's Premium Increase Amid Consumer Complaint

01 Sep 2025: Paige Estritori

A recent decision by the Australian Financial Complaints Authority (AFCA) has ruled against a homeowner seeking an $18,000 refund from Allianz. The homeowner claimed that the insurer failed to adequately inform her about substantial increases in her optional flood cover premiums. Initially, her monthly payments surged from $369 to $1277 in August 2022, a change she only noticed in March of the following year through her bank statements. - read more

Rising Group Premiums Pose Challenges for Australian Life Insurance

28 Aug 2025: Paige Estritori

Insurance premiums for group life policies with long-term benefits have surged between 15% to 25% on average in the first half of the year, according to a mid-year market update from Marsh Australia. While the steepest increases affected those with adverse claims experiences, short-term rates and premiums for permanent disabilities remained relatively steady. The sector has also become more selective, with insurers adopting stricter underwriting standards, particularly eschewing high-risk industries. - read more

Concerns Arise Over Construction Code Pause Amid Housing Push

28 Aug 2025: Paige Estritori

The federal government's initiative to accelerate housing development by relaxing certain building regulations has raised alarm within the insurance sector. Housing Minister Clare O’Neil announced changes on social media, indicating a strategic pause on parts of the National Construction Code to expedite building approvals and encourage the construction of much-needed homes across Australia. This move comes in response to challenges in the approval process, which often delays construction. - read more

RACQ Insurance Ordered to Increase Payout After Claim Handling Flaws

27 Aug 2025: Paige Estritori

RACQ Insurance has been instructed to bolster a payout to a customer following a ruling by the Australian Financial Complaints Authority (AFCA). The dispute arose after the insurer's handling of a house fire claim lodged by a woman in October 2023 was found lacking. The fire, initiated by scented candles, resulted in significant fire and smoke damage to her home. - read more