Words debated following landslip
The insurer said the claim was limited to the landslip extension, which had a $10,000 excess. However, Lee said a heavy rain event was the underlying cause of the damage, not the landslip.
The insurer said the claim was limited to the landslip extension, which had a $10,000 excess. However, Lee said a heavy rain event was the underlying cause of the damage, not the landslip.
After a heavy rain event, a rental property was damaged when the slope behind it slipped. The repair costs for the damage came to $9,706, and Lee* made a claim to the insurer.
The insurer said the claim was limited to the landslip extension, which had a $10,000 excess. Because the amount of damage ($9,706) was less than the excess ($10,000), the insurer said there was no claim to pay.
Lee* complained to the IFSO Scheme, because he said the damage was caused by a storm so the standard excess should apply. Lee said the heavy rain event was the underlying cause of the damage, not the landslip. This would mean the exclusion should not apply and the damage should be covered under the standard policy excess.
The IFSO Scheme looked at the complaint, considering the natural and ordinary meaning of the words “loss following … landslip” and the context in which the words appeared.
The word “following” by definition means happening afterwards in time, like saying “in connection with” or “arising from”. None of these uses would normally imply underlying cause.
Given that the landslip immediately preceded and was connected with the damage, the insurer had shown the damage was a “loss following … landslip”. It did not have to prove that the landslip was the underlying cause of the damage, rather than the rain.
The IFSO Scheme found that the insurer had correctly applied the exclusion in the policy and was not required to pay the claim.
Complaint not upheld
When interpreting a contract, the IFSO Scheme considers, among other things, the natural and ordinary meaning of the words, the intention of the parties, the contract as a whole and the context in which the words appear.
*Name has been changed