A terminally ill man whose home became uninhabitable because of mould has won a claim dispute with Allianz, which has been ordered to fix his house or make a cash settlement.

The insurer’s restoration technicians did not adequately assess the damage or ensure the home was properly repaired, the Australian Financial Complaints Authority has ruled.

In September last year, the insured lodged a claim for water damage caused by a burst bathroom flexi-hose.

Every room in the house was affected and, because the water was hot, the moisture permeated building materials faster.

Allianz hired restoration technicians and later in the month it offered a $28,123 cash settlement based on their damage reports, or said it would engage a builder to make repairs.

By then, the property owner, an asthmatic, had hired a mould remediation specialist who said the required work would cost $151,360. Allianz said this quote was excessive.

AFCA says by October last year the property was uninhabitable.

The ombudsman says the claims history is “highly complex” but it expedited the complaint after the insured was diagnosed with cancer in November last year and told he had two years to live. He has not lived in the house since then.

Related article: Insurer told to lift payout, compensation to ‘devastated’ family

Both insured and insurer agreed this year that an independent mould remediation specialist should report on the issue.

Now, AFCA has ruled that Allianz must appoint a specialist to perform repairs, with laboratory testing and reports written before and after the work.

Alternatively, the homeowner can choose to take a cash settlement with a 20% uplift.

Allianz has covered some of the man’s temporary accommodation costs, but AFCA says it should pay for him to live closer to the property until repairs are completed.

It must also pay the maximum $6300 compensation for the policyholder’s “extensive degree of stress, delay and inconvenience as a result of ... poor claims handling”.

“The complainant has been able to live with his sister for an extensive period,” AFCA said. “He will be required to live in alternative accommodation during a convalescent period while the remediation and repair work is completed.

“The complainant has had to, and will continue to, endure that experience and inconvenience, rather than the comfort of his own home.”

See the ruling here.

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