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Rotten luck: couple fail to show timber damage was covered

Property owners who claimed for storm damage will not receive a payout after the complaints authority determined the loss occurred before they were insured.  

The couple were renovating their house in August 2023 when they discovered rotten timber and water staining in several areas.  

They later engaged an expert who said rainwater had entered the property after storms caused tiling to lift. 

But insurer Auto & General’s expert found several potential causes for water entering the home, including unstable and cracked tiling, and loose mortar on the ridge cap and near the chimney.

The insurer said the damage occurred before the claimants were insured, noting both experts agreed it “happened gradually”. 

The complainants acknowledged the ingress occurred over years. They argued the rot progressed slowly and was “impossible to see and prevent”. 

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The couple presented the Australian Financial Complaints Authority with a report from June 2021, before they bought the property, that did not identify any of the claimed damage.  

But the authority says the report does not prove the damage occurred after they were insured. It says it is likely the author missed the rot because it was in areas that were mostly inaccessible to them.

AFCA says it is fair for the insurer to decline the claim, given the lack of evidence of how the timber rot progressed during the insured period or any storms that could have caused the loss.

“The onus is on the complainants to show they have suffered a claimable loss.

“While I accept that there is damage to the property, the complainants have not provided sufficient persuasive evidence to show this damage occurred during the policy period.”  

However, Auto & General must pay the complainants $2500 for its failure to carry out make-safe work after removing a ceiling and “unreasonable delays” in appointing an engineer.  

AFCA says the delays meant repairs could not be finished and they caused unnecessary stress to the couple, who were expecting a baby.  

See the ruling here


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