Homeowners lose fire dispute – Daily – Insurance News

The owners of a vacant house that was heavily damaged by fire will not be able to pay their claims after a dispute settlement determined that their insurance was liable to be denied.

Homeowners filed a claim under their building code on November 10 last year.

Auto & General denied the action after an investigation found that the plaintiffs failed to notify them that the property was vacant and canceled their policy for failure to disclose.

The opposition admitted that the site was underutilized but said it was due to renovations that had taken too long due to restrictions and delays due to Covid.

They said they want to rent and renovate the house while they are waiting for the development work of the house which is expected to take one year.

Auto & General said the building’s owners knew at the time the plan was launched on January 22 last year that major renovations were needed to make the property habitable.

The plaintiffs told the insurer that they would “try to borrow [the property] fast” and that the property will not be vacant for more than 60 consecutive days.

Due to the ongoing covid restrictions, the owners were not able to inspect the building until two weeks after the order was put in place.

The owners of the house said that as soon as they looked at it, they realized that the place needed more renovation than they first thought. They said they cannot set a deadline for the renovation project due to Covid restrictions.

The Australian Financial Complaints Authority (AFCA) said that the main problem is whether the insurer can prove that the claimants knew that the property could not be occupied beyond the 60 days mentioned in the questionnaire.

“What is important is that the matter must be a matter of good faith, maintained with sufficient certainty to justify the word ‘known’,” AFCA said.

The agency said that according to the evidence available, the plaintiffs show that they want to lease the land once the plan is issued.

The decision required the insurer to withdraw the cancellation of the policy and the alleged breach of duty disclosed by the plaintiffs’ insurer.

AFCA determined that Auto & General was entitled to deny coverage for fire damage to the property, arguing that the policy clearly stated that it would only provide coverage for a building that had been unoccupied for 180 days.

At the time of the settlement, the plaintiffs did not notify the insurer that the building was unoccupied and occupied for 292 days.

The AFCA rejected the claims of the house owners that they did not know about the policy saying that it was stated in the letters they were given.

The Commission considered whether it was appropriate for the insurance company to rely on the provisions of Section 54 of the Insurance Contracts Act 1984 (Cth), which prohibits insurers from denying claims based on post-contractual conduct unless the conduct is shown to contribute to the loss.

The fire was confirmed as suspicious by the police, and no one denied that some unknown people entered the house at some point leading to the fire because it was empty.

AFCA said it was true that the building was left at risk of deterioration because it had been left unoccupied for more than 180 days.

The ruling allowed Auto & General to reject the claim but required it to refund the claimant’s premiums from July 21 last year – 180 days after the original date – because the cover was no longer valid.

The insurer was also required to pay the claimant $2000 for non-monetary losses related to mental stress and problems caused by the policy.

The group said some of the insurance’s investigations were dubious, including several interviews that were deemed unnecessary and invasive of claimants’ privacy.

Click Here on the whole decision.