'Not up to code': AFCA criticises insurer over delayed storm claim

The Australian Financial Complaints Authority (AFCA) has criticised Allianz’s handling of a storm claim, saying it was hit by delays and poor communication.

Allianz also failed to engage properly with AFCA, the dispute ombudsman says, as it attempted to resolve the complaint.

The complainants say a storm on March 2 last year led to water entering their home, damaging the structure and some contents.

The insurer’s assessor and builder provided reports which suggested some aspects of the claim should not be paid. The assessor recommended the building damage, which was estimated at $17,582, could be denied and that contents that had already been disposed of should not be covered.

“The insurer has taken steps to assess the claim but is yet to make a claim decision,” AFCA says.

“The available information suggests it may consider that some of the claimed damage is due to maintenance issues or defective construction so [is] excluded from cover.”

But AFCA says the insurer’s builder identified issues with repairs carried out by the insurer in 2019 after hail damage, and that it is “satisfied on the balance of probabilities” that the repairs were inadequate and contributed to the latest damage.

AFCA says Allianz was notified of the complaint on May 31 last year, and provided an interim response on June 30, saying that it was awaiting an itemised statement of works before making a decision on the claim.

Allianz said it would provide another update by July 14 but AFCA says it failed to do so.

“The insurer has not provided a substantive response to this complaint,” the ruling says.

“No reason has been provided for the insurer’s failure to engage in the AFCA process.”

AFCA’s rules allow it to draw an “adverse inference” from a party’s “unreasonable failure” to provide information that has been requested.

AFCA says the claim must be paid in full after a new statement of works and quotes are sourced, adding a 15% uplift. It also says work must be carried out to rectify the 2019 repairs. It said once a list of damaged contents and supporting information is provided, this must also be covered.

It says the claim can be cash-settled due to the continued delays and deterioration of the relationship between the insurer and its customer.

Allianz must also pay $2000 in non-financial loss compensation.

“I am satisfied that the insurer has unreasonably caused the complainants stress and inconvenience through delays and poor communication,” the AFCA ombudsman said.

“The insurer has not acted in a manner consistent with the General Insurance Code of Practice.”

Click here to read the full ruling.