Homeowners who sought a $234,646 payout to repair cracks in their brickwork will not be covered after the Australian Financial Complaints Authority ruled the damage had no claimable cause.

The Melbourne policyholders claimed in August 2023 for “significant structural damage internally and externally”, flagging issues with the brickwork, rendering, plaster and flooring.  

They said the damage had been occurring since at least 2021 and stemmed from a large tree on their neighbour’s nature strip that caused soil around the home to dry out.  

Insurer Suncorp did not dispute that the tree and its extensive root system caused the damage, but said its policy would not respond to such a loss.  

A geotechnical engineer’s report said the claimants noticed cracking in their garage and hallway soon after the home’s construction in 2011. The issues became more apparent over time.  

The report attributed this to the impact of the tree’s roots on the clay foundation soils.

It also noted there had been “issues” with stormwater pipes, but these did not “appear to have directly caused” the cracking.  

A claimant-appointed engineer said the damage was due to “inadequate design and construction”, with plumbing leaks, seasonal conditions and the “highly reactive” area as contributing factors.  

AFCA agrees with the insurer that there was no claimable loss.

It notes the experts pointed to a combination of tree roots affecting soil moisture, inadequate building design and long-term ground movement as causes of the cracking.  

“There is no specific ‘incident’ or insured event to account for the damage to the home,” the authority said. “While there was reportedly evidence of a leak at some point, there is no suggestion this was the dominant or effective cause of the building movement.

“Given this, the complainants are unable to show the policy responds to the loss.”  

Suncorp offered an ex-gratia payment of $1000 in recognition of the claimants’ circumstances, which AFCA says is fair.

Click here for the ruling.

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