A homeowner who tried to link termite holes in his wall to a previous storm damage claim will not be covered after the complaints authority accepted long-term moisture issues led to the loss.  

The claimant reported the termite damage in January 2023, about six months after he was made aware of them by a pest controller.  

He said the termites’ presence stemmed from moisture problems in a wall, which was caused by water overflowing from his neighbour’s gutters during a storm in 2019.

Insurer IAG had made a cash settlement for the 2019 storm damage and repairs to the wall had been made, but the homeowner said the moisture issues persisted.

He noted the property had not previously experienced termite activity since being built in the 1880s.

The homeowner consulted several experts, including an entomologist, who suggested moisture in the affected wall had taken a long time to dry, attracting the termites.  

But IAG’s engineer said it was unlikely the storm event caused permanent moisture that would have attracted the termites. They said damage was also found in areas away from the gutter.  

The insurer’s engineer said there was evidence termite damage could have been occurring since the homeowner replaced his floorboards in 2013.  

In its dispute ruling, the Australian Financial Complaints Authority says it is unlikely the termites were associated with the covered 2019 event.  

An AFCA ombudsman notes the homeowner mentioned his neighbour’s gutters were generally poorly maintained.

“While I accept that the insurer would be liable for termite damage if it was a direct consequence of the 2019 claim, I am not satisfied the information provided shows this is what has occurred.  

“Rather, I consider the information shows the moisture issue developed over time, from water pooling on the path against the property and leaks from the neighbour’s guttering.”  

See the ruling here.