SERVICE: House
OUTCOME: Settled
Issues: Gradual Damage; Conflict of Evidence
Summary: Mr O’s* complaint was settled, because the expert’s contemporaneous evidence indicated that the damage to the guttering had been sudden, as a result of being struck by a freight truck.
Mr O held insurance on his house.
In January 2019, a freight truck bumped into the corner of the house. At the time, Mr O did not notice any damage. However, in or about October 2020, he noticed water damage in the area.
In October 2020, Mr O made a claim for the damage.
The insurer stated that the only damage was to the brickwork, which would cost less than the excess and no claims bonus to repair. As a result, it declined the claim. The insurer also said it believed that all other damage was not sudden and, therefore, did not fall within the scope of cover provided by the policy.
Mr O made a complaint, saying that the insurer had missed damage to the guttering, which was sudden and caused by the freight truck.
The case manager’s assessment
When an insured makes a claim under an insurance policy, the law says that it is up to them to prove that they have suffered a loss, which is covered by the policy.[1] Here, this meant Mr O needed to show that the damage was “sudden”. The policy did not define “sudden”. However, this is a legally defined term which means “‘abrupt’, ‘all at once’, ‘instantaneous’”.[2] Therefore, in order for the damage to be covered by the policy, it had to have occurred “instantaneous[ly]”.
The case manager had concerns about the expert evidence the insurer was relying on. This was because the original loss adjuster and Mr O’s builder both believed that the joint in the guttering had been damaged by the freight truck, rather than over time, as another loss adjuster believed. The second loss adjuster had assessed the damage at least 6 months later.
Following discussions with the case manager, the insurer offered to settle the claim by paying the total amount of Mr O’s quote of $7,337 to repair the guttering, with an additional goodwill payment of $1,000 for delays in settling the claim, for a total payment of $8,337. Mr O agreed to accept this amount in full and final settlement of the claim.
*Name has been changed
Complaint No: 00228072
[1] This is known as a prima facie claim.
[2] Lumbercorp (BOP) Limited v GIO Insurance Limited (2000) 11 ANZ Insurance Cases 61-475 (HC), Justice Wild.