An elderly property owner who made a 550km round trip to investigate a water leak after an insurer’s tradesman failed to find the source has been awarded $5000 compensation for claim mismanagement.

The insureds, a retired couple in their 70s, lived rurally but owned an apartment in the city that they used when attending medical appointments and other commitments.

The city home became uninhabitable after water damage in June 2024.

Insurer Chubb’s appointed builder conducted two leak detection tests but failed to identify the cause. After the second test in July found no active leaks, the insurer planned no further investigations.

That August, the 79-year-old husband travelled to the apartment and spent two days investigating the problem. Despite having no professional plumbing experience, he found the source and sent the insurer photographs and a video of his findings.

The leak was caused by loose screws between the ensuite toilet’s cistern and base, with one screw completely detached.

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The insurer’s builder later confirmed this, as did a plumber engaged by the couple.

In a dispute ruling, the Australian Financial Complaints Authority says it was “prudent on the part of [the owner] and fortunate for the insurer” that the husband acted.

Yet the insurer continued to communicate through an owners’ corporation’s broker rather than directly with the couple. The homeowners said they were repeatedly denied access to claim reports and other information, despite their requests.

Chubb said it followed protocols for strata-managed properties, but AFCA says it “would have been fair and reasonable for the insurer to make a simple adjustment in its administrative systems to facilitate communication directly with the complainants”, at least in providing copies of documents sent to the broker.

Doing so earlier would probably have relieved much of their upset and anxiety.

AFCA finds no persuasive explanation for why the insurer’s builder failed to find the leak, and it criticises the insurer for failing to explain delays, including a month-long wait for its tradesman to return after being told of the discovery.

The apartment was unrepaired and uninhabitable for seven months, disrupting the couple’s access to accommodation near medical services. AFCA says the insurer should have made more detailed enquiries about their vulnerabilities, given their age and health problems.

Chubb must pay $5000 non-financial loss compensation and reimburse a plumbing report fee and the husband’s return travel costs, with interest.

“I am satisfied the complainants have suffered an unusual degree of physical inconvenience and interference with their expectation of enjoyment and peace of mind. Much of this has been brought about by instances of claims mismanagement on the part of the insurer,” an AFCA member said.

See the full ruling here.

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