Claimant covered for storage unit inundated by stormwater

A complainant who had his self-storage unit flooded following heavy rainfall will be compensated for his losses after winning a claims dispute against QBE.

The man filed a claim for the damage as a beneficiary of the storage facility’s insurance policy, which provided cover for customer goods.

He said the unit was inundated with water after significant rainfall in late February last year and sought to be covered under the policy stormwater perils benefit.

QBE did not dispute that water entered the unit but said the cause was due to a nearby river flooding, which the policy would not have covered.

An insurer-appointed hydrologist, referred to as WT, said the region experienced “extraordinary” levels of rainfall – expected only once every 20 to 50 years – in the days of the claimed event.

WT reported that the storage facility had been near the Mooloolah River catchment, which overflowed during the storm.

The report said that the river reached a height of 10.8m Australian Height Datum (AHD) on February 26, a few hours after rainfall peaked, which was 0.2m above the estimated storage unit floor level.

It also highlighted employee testimony who said that water appeared on the back of the property at 7am on February 26 and later entered the property after overtopping sandbags.

The Australian Financial Complaints Authority (AFCA) acknowledged WT’s findings that floodwaters inundated the building but said the matter was related to the cause of the waters that first overwhelmed the unit.

AFCA observed that the property’s ground elevation differed from the front and rear sides by approximately 0.9m, and there was a slight fall in the unit due to the differences.

It said the evidence from the employee was “unreliable” as the insurer could not verify that the person was on the site at the time of the event, and pointed to inconsistencies in when they reported that the loss occurred.

The complainant provided photographs of the front of the site, which showed drains just outside the unit’s door that he said were filled after a few days of steady rain.

AFCA said the stormwater was shown to be a likely source of the initial water and that QBE’s findings did not conclusively refute this.

“Noting the peak period for rainfall intensity occurred several hours before the peak of the flood, it is likely stormwater run-off could have occurred and preceded floodwater into the unit,” AFCA said.

“I am not satisfied the available information shows the cause of damage to the complainant’s items was floodwater.”

“This is because I do not believe the insurer can show floodwater entry preceded the stormwater run-off entry.”

It said that the policy responded to the event and that QBE was not entitled to decline the claim.

The complainant also sought compensation for the insurer’s handling of the claim, saying that it was poor and negatively affected him while he was in a vulnerable state.

QBE acknowledged that it did make mistakes in the process, which it attributed to poor internal communication, but noted that it was accommodating to the complainant after it became aware of his condition.

AFCA did not require QBE to award non-financial losses, saying it had “managed the claim reasonably.”

“I am not satisfied the exchanged information shows the insurer acted inappropriately or breached the complainant’s privacy,” AFCA said.

“The insurer shared the complainant’s information internally to best address the issues raised. In my view its actions were appropriate.”

Click here for the ruling.