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If a tree falls, is it impact damage or storm?

Homeowners who sought cover after a falling tree damaged their boat and nearby structure have been awarded $205,449 for their losses following a decision by an Australian Financial Complaints Authority (AFCA) panel. 

The complainants lodged the claim on March 1 last year after reporting impact damage from the tree to a catwalk and the pontoon a few days earlier. 

A report from the complainants’ expert, referred to as JS, said the tree had fallen onto one of the catwalks, causing it to submerge prematurely. JS says subsequent damage was also caused to the other two catwalks, causing more debris to build up. 

JS did not explain why the tree fell but concluded that the pontoon’s safety chain had snapped, causing the boat to detach. The report established that the pontoon sustained “catastrophic damage” and recommended that it be replaced.

Suncorp did not dispute the sequence of events highlighted by JS’ report but declined the claim after determining that the tree had fallen due to a storm or flood. 

The insurer says the complainants’ home insurance policy excluded losses to pontoons, mooring poles or other accessories if floods or storms damaged them. Impact damage however, was covered.

Suncorp provided the panel with data confirming 700mm of rainfall in the area, which it says caused flooding and led to the tree’s fall. 

The claimants acknowledged that there had been rainfall for about a week from February 22 but disputed the insurer’s contention that it had caused the tree to fall, saying that there had been no relevant storm event identified in this period.

The insured notes that the policy defines a storm as a “single weather event” that could be “accompanied by strong winds, rain, lightning, hail, snow or dust”. 

They say there had been “no severe wind or rainfall” on the evening of February 25, when the tree fell, and that the heaviest rainfall came after the event occurred.

AFCA accepted photographic evidence from JS’ report that established that the event occurred before the early morning of February 26

“The evidence from JS clearly shows the damage occurred before the flood water arrived,” AFCA said.

“JS has further supported its reasoning by identifying visible damage, which was highlighted using the same photos.”

The panel agreed that Suncorp was not permitted to rely on the flood exclusion, saying that it did not provide valid evidence to show that the flood was the proximate cause of the tree damage.

“The insurer at original decision and IDR stage maintained (somewhat inexplicably in the face of the information and evidence from JS) that the flood exclusion applied,” AFCA said.

“At AFCA, the insurer decided to decline because the tree fell because of a storm, and therefore storm was the proximate cause of damage, and thus pontoons etc were excluded.

“Putting to one side the question of whether this is how the impact and storm provisions are intended to interoperate, the insurer did not provide any evidence that a storm had caused the tree to fall and caused the ensuing damage.

“The insurer simply pointed to the significant rain that had fallen. The panel does not consider that this is sufficient to demonstrate a single storm event caused the damage.”

The ruling accepted that the complainant’s request for a cash settlement was fair “given how the insurer has handled this claim”.

JS originally quoted the repair for the ponton at $154,787 but later revised this to $178,652. Suncorp did not dispute the revised offer.

The panel agreed JS’ quote was fair and added 15% to the settlement for any contingencies related to the replacement of the pontoon. 

Click here for the ruling.