A strata block owners’ corporation has won a payout for hail damage after the industry ombudsman ruled roof dents were more than a “minor cosmetic” issue.

The owners of the 26-lot property lodged a claim in December 2022, but roof work was rejected by Strata Community Insurance Agencies, which found the hail impacts did not constitute “damage”. The dents did not impair the roof’s functionality or require roof sheet replacement, the insurer said.

In settling their claim dispute, the Australian Financial Complaints Authority has weighed evidence from experts appointed by the strata owners and an engineer working for the insurer.

“I do not find the insurer’s engineering reports persuasive,” an ombudsman said.

The insurer’s engineer “did not walk the steep roof faces after cherry picker access was refused by the body corporate. Instead, [they relied] on third‑party roof access for photographs and measurements, supplemented by ground and ladder observations.

“On this basis [the insurer’s engineer] concludes the dents do not impair weatherproofing, drainage, integrity, serviceability or performance.

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“By contrast, the complainant’s experts performed direct, on‑roof inspections, producing close‑range images that show clear impact deformation at roof level.

“In determining ‘damage’ under its ordinary meaning, I place greater weight on the direct roof‑level evidence.”

AFCA notes the insureds’ strata policy does not define “damage”, but all parties agreed it means “physical harm that impairs the value, usefulness or normal function of something”.

In ordering the insurer to cover roof repairs, AFCA said: “The roof has hail indentations that are visible to the naked eye. They have physically altered the roof and, arguably, impaired its value.”

A valuer’s report for the policyholders said the damage could wipe about $1.5 million from the property’s value.

The insured’s experts recommended full roof replacement, but AFCA is not convinced that is required.

The insurer has been told to arrange an independent inspection and obtain a scope of works before settling the claim in line with the findings. It had earlier agreed to cover damage to skylights and other smaller matters.

The owners also sought non-financial loss compensation, but this has been rejected because the policyholder “is an incorporated entity that cannot experience personal distress or inconvenience”.

See the ruling here.