Homeowners whose renovation work stalled after their insurer cited a relationship breakdown will complete the project after winning a counterclaim.
Allianz issued a financial settlement for the remainder of the project, saying that the relationship with the claimants was not possible after a number of Australian Financial Complaints Authority (AFCA) complaints were raised during the appeal process.
But in the AFCA decision he said that if the insurer starts to fix it, it should finish it. “It is not fair to abandon the repair work and leave it to the insured to complete it,” the decision states. It added that the end of the relationship was “largely an insurance problem”.
The plaintiffs had a home and contents policy and filed their first lien when a falling tree destroyed their home on March 13, 2019.
A month later, the homeowners filed the first of six AFCA complaints against Allianz. They said the insurance company refused to repair their roof and offered less than what was required to restore it. Then the insurance company agreed to replace the roof.
Throughout 2019 and 2020, other complaints were made, with critics describing the reform as “one disaster after another”.
The insurer originally appointed an architect to repair the building and a loss adjuster, known as SW, to handle the claims.
The owners of the house complained about the construction of the house and asked the insurance company to appoint another builder, called JL, to fix the defects. In an email dated September 10, 2019, SW said the initial construction work was “very poor”.
In November 2020, the plaintiffs reported that they were satisfied with JL but said that the maintenance work stopped suddenly without communication.
The owners said they contacted JL’s subcontractor, who told them Allianz had not paid him enough for repairs and refused to hire a landscaper to repair the exterior damage.
The plaintiffs asked SW to provide workers to complete the renovation of their home and later requested insurance to remove the lost controller from the claim. Allianz refused to remove SW, and SW and JL visited the appellant’s house.
The SW report dated June 23 last year highlighted cracks in the living room, damage to the en suite, and the need for repainting in several rooms. The report said that the repairs will cost more than $50,000, but the insurer did not change its cost of $3681.11 until March of this year after AFCA’s request.
The complainants told AFCA that they would not allow the inspection to take place, and would not allow it again until a decision on the complaint was made.
“It just gives them more time and evidence to explain why they shouldn’t fix my property,” the plaintiffs said.
Homeowners reported mold that they said was painted over instead of cleaned. Professionals appointed by the insurance company made several inspections, none of which found mold.
After SW’s report, the insurer decided to assign a cleaner to check for any signs of mold although it was not necessary, but the plaintiffs refused.
The AFCA concluded that Allianz was responsible for correcting the allegations in the report. The group acknowledged that the parties’ relationship was strained but rejected the insurance company’s offer of $62,500 to repair it.
It said that the plaintiffs are not stopping the ongoing rehabilitation works and said that they are satisfied with JL’s performance.
AFCA said the relationship had not worked out because Allianz had interfered with the dispute and that previous complaints by the landlords were well-founded.
“It would be unfair to the insurance company to settle the costs. Therefore, the insurance company should settle the claim by preparing the necessary repair work, and guaranteeing the repair,” said AFCA.
“The parties must work together to resolve the issue. The plaintiffs must comply with the insurer’s demands, including requests to allow the insurance contractor to access the property.”
Allianz had to pay $4967 for the furniture damaged by the first builder and interest from January 13 this year until the payment date.
AFCA claimed that the insurer’s failure would cause undue stress, inconvenience, and delay and awarded the plaintiffs $4000 in non-pecuniary damages.
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