A QBE customer identified as vulnerable has won a dispute over the denial of a claim for a fire at his pizzeria, even though five other claims in recent years were not disclosed when applying for his policy.

He has also been awarded $2500 compensation for “unreasonable” stress and inconvenience.

The claim was lodged a year ago after fire destroyed the pizzeria and the man’s home above it.  

The pizza maker’s accountant, who applied for the policy online, had said no claims were made in the previous five years. In fact, five had been made between 2020 and 2022.

In a dispute ruling, the Australian Financial Complaints Authority agrees the business owner made a misrepresentation, but it says QBE has not established it would not have issued the policy had there been full disclosure.

QBE did not provide a statutory declaration from an underwriter to support its position, despite being invited by AFCA to do so. It instead relied on an email from a senior insurance specialist whose “qualifications to comment ... have not been revealed”.

“QBE has not shown it would not have insured the complainant if the correct claim history had been disclosed, and it unreasonably caused stress and inconvenience,” AFCA said.

The insurer identified the pizzeria owner as vulnerable and provided him with details of its free counselling.

But the man told AFCA he felt “violated, extremely uncomfortable and traumatised by the claim process” as the case was transferred to various people at both an external investigation contractor and within QBE.

“He says QBE did not take his situation seriously, even though he requested QBE to escalate his case multiple times ... [and] QBE unnecessarily delayed the claim investigation, whereas he fully co-operated, attending multiple interviews,” the authority said.  

AFCA says there were “shortcomings” in the support QBE provided to a vulnerable customer, and some communications should have been “more empathetic”.

“Merely providing information on free counselling services was not enough in the circumstances,” it said.

In rejecting QBE’s argument that it would have declined cover had it known of the previous claims, AFCA says an online quick reference guide it provided was marked as a 2022 draft version and had different screenshots to ones in QBE’s claim denial letter.

The screenshots in the claim denial letter sent to the pizzeria did “not unequivocally” state QBE would not issue insurance.

They instead showed that had “2+” previous claims been selected instead of “0”, the online system would have said it could not offer a quote “at this time” and that “insurance may be available through QBE’s partner”.

QBE has been ordered to reinstate the policy, assess the claim and pay the compensation.

See the ruling here.

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