A complainant whose underinsured business was destroyed by bushfire last summer was told in a claim dispute ruling that she had many years to seek alternative insurance cover better suited to her needs.

The Australian Financial Complaints Authority (AFCA) said it considered submissions from the woman claiming QBE representatives failed to provide adequate advice or suggest a policy fit for purpose, but it was “not persuaded these assist the complainant”.

“If the complainant was dissatisfied with the offering from the insurer, she had ample time from policy inception to the loss to seek alternative cover that was better suited to her needs,” AFCA’s ruling says.

“The panel accepts the insurer’s submission that its representatives are not brokers. As such, they do not give advice about which type of cover is best suited. It is up to the individual to ensure the policy and cover offered suits their needs.”

The woman’s property, which comprised a business on the ground floor and a residential dwelling on the top floor, was significantly underinsured.

She held two policies with QBE for seven years – a business policy for the building, business contents and broad form liability, and a residential contents policy for her personal effects located upstairs.

The woman said she had asked QBE to increase the sum insured “on multiple occasions” and the insurer failed to take action, but QBE denied this request was ever made.

She went to AFCA seeking higher limits for temporary accommodation, the value of inflation indexing from the policy inception and full cover available under an additional benefits section of the policy. She was mostly unsuccessful in the dispute.

The property should have been insured under a residential policy as it was dual use, she argued, which would have assured the inflation indexing and extra temporary accommodation benefits.

Given the policy had been in force for a considerable time, the woman had sufficient time to review her sum insured on multiple occasions and elected not to amend it, AFCA said.

The panel said it was satisfied the building “presented first and foremost as a business property” and QBE was entitled to decide not to index business policies against inflation and so was not required to increase the sum insured to match seven years of inflation.

“This determination is substantially in favour of the insurer,” it said. “Based on the available evidence, the panel is persuaded the woman did not request an increase to the sum insured value of the property.

“The property has been insured correctly as business in accordance with the insurer’s underwriting guidelines.”

However, AFCA agreed QBE should pay some additional benefits on top of the sum insured: discharge of mortgage, seasonal increase period, removal of debris and catastrophe escalation costs.

QBE had already previously outlined it would consider any claim made under “catastrophe escalation cost” benefit.

AFCA said this sum, $52,000, was to be paid and QBE was also required to settle up to a further 10% if the woman was able to demonstrate that increased costs were incurred as a result of the bushfire event.

AFCA said as the property was significantly underinsured the owner could not rebuild without incurring additional costs that would “greatly exceed the 20% maximum increase on top of the sum insured”.

QBE also confirmed it would settle up to $25,000 for removal of debris.

AFCA disagreed with the woman’s demands that QBE pay government fees, landscaping or loss of land value. Those benefits were only available in the event the sum insured was not exhausted because of the insurable event, it said.

During the dispute, QBE agreed to increase its settlement under a seasonal increase period benefit, provided the woman present supporting information showing the relevant amount as she had been requested to do.

See the ruling here.