In February 2017, Kim* made a claim for cracking walls in her house caused by vibration from roadworks. In April 2017, the insurer accepted the claim and arranged for experts to assess the damage and undertake temporary repairs.
In February 2018, the insurer told Kim it had declined the claim, based on an exclusion for loss caused by vibration. The insurer offered to continue to investigate the claim on the basis of holding the road construction company responsible.
Members of the Insurance Council of New Zealand are bound by the Fair Insurance Code. While the IFSO Scheme found the insurer could rely on the vibration exclusion to decline the claim, it had significantly breached the Code. The IFSO Scheme had serious concerns about the delays, lack of transparency and follow-up relating to incomplete repairs.
After discussions with the IFSO Scheme, the insurer agreed it had significantly breached the Code. The insurer provided a detailed apology and offered Kim an unconditional ex-gratia payment of $50,000 in recognition of customer service issues and Code breaches, and $5,000 towards Kim’s legal fees.
Kim accepted the offer and apology. The IFSO Scheme determined the significant breach was resolved.
Complaint settled.
*Names have been changed.