Hollard has been told to increase its cash offer to property owners after the financial services ombudsman found it mishandled their vandalism claims.  

The owners filed two claims for damage to their investment property in 2021 and 2022, when the home was flooded by vandals who turned on taps and blocked drainpipes. All external windows were smashed in the second attack.  

The claimants said they asked Hollard to secure the property, as advised by police, and the insurer installed fencing around the house but removed it after two years.    

The property owners said the insurer assigned them seven case managers over three years, during which time there were more damaging break-ins. The company was not prepared to complete repairs and offered a cash settlement, which was rejected, they said.

Hollard closed the claim in April last year without making repairs.

It told the Australian Financial Complaints Authority it could not complete work due to the building’s non-compliant structure, pre-existing defects, overall condition and presence of asbestos.

During AFCA’s case management process, the insurer paid out $83,869 and offered to settle for $205,975 overall based on an updated scope of works.  

The complainants engaged a builder who quoted $363,022 for repairs. The builder said it was “necessary to remove all skirting, architraves and wall lining”.  

AFCA says Hollard did not establish its reasons for not completing repairs, but it accepts the breakdown of the relationship between the parties means a cash settlement is fair.  

“The property was built 60 years ago and the assessment reports provided by the insurer have not adequately explained whether the property was non-compliant at that time,” the authority said.  

The ombudsman considers it fair to rely on the claimants’ repair quote.  

“This is the only actionable quote, and it is therefore the best evidence of the cost to repair the property. Although the insurer says the ... quote includes upgrades which are not part of the scope of works, it has not explained which items it considers unreasonable.”  

AFCA has ordered Hollard to pay $287,878 in addition to the sum already paid.  

The insurer must also pay $4000 compensation for unreasonable claim delays, $2266 for the claimants’ professional costs and $1026 for electricity bill losses.  

See the ruling here.