A Melbourne business owner has lost a dispute with his insurer after it denied a payout for food stock ruined by a broken freezer.  

The insured filed a claim in January after the freezer’s motor failed, which he attributed to a heatwave.

Insurer Suncorp agreed to cover the freezer but not the stock, because the loss was due to mechanical failure. The claimant’s own technician had concluded the fault was “likely due to usage and age of the freezer”.  

The business’ policy included coverage for machinery breakdown, extending to “direct loss or damage to other property insured as a result”.  

But the Australian Financial Complaints Authority says food stock does not fall under the general definition of “property insured”.

“The property insured is the property described in the policy schedule in respect of each cover section, and stock is not described as covered in the machinery section of the policy schedule.”

The claimant disagreed the loss was due to mechanical failure, noting the freezer motor was only seven months old.

It was also suggested the businessman received conflicting information from the technician that indicated the heatwave might have caused the loss – but no supporting evidence was provided.

AFCA says the freezer damage is attributable to a mechanical failure, not a weather event.  

See the ruling here.