Court backs Allianz in hail claim deductibles dispute

The NSW Court of Appeal has found in favour of Allianz in a claim dispute over whether a deductible should apply once or multiple times after more than 100 houses were damaged in a Sydney hailstorm.

Rawson Homes had argued only one deductible of $10,000 should be paid following the storms, which caused damage to tile roofs of partially constructed houses in Kellyville and Rouse Hill on February 18, 2017.

Allianz agreed to pay the claim but said the $10,000 deductible should be applied to the sum insured for each of the 122 damaged houses that was subject to an individual Insured Contract.

The initial Supreme Court decision found in favour of Rawson Homes, holding that it had made one claim and not multiple claims under the policy, entering a judgment against Allianz for $1.4 million plus interest.

That ruling found there was only one event, which was the hailstorm, and only one deductible was to be applied.

The parties agreed that if the Allianz view of the policy construction was correct, judgment should instead be given for Rawson Homes in the smaller sum of $266,671 plus interest.

The appeal was heard by Justices Anthony Meagher, Mark Leeming and Richard White.

The appeal judgment says the more than 100 residences under construction were each the subject of a separate building contract which started during the period of insurance and were covered by the policy.

The starting point was the insuring clause and it “operates with respect to each Insured Contract and the contract was to be read as a whole,” the judgment says. The sum insured was $2,732,000 per Insured Contract, which applied to individual homes.

Justice Leeming says that while it is possible in principle for there to be a single aggregated deductible, that was not the proper construction of the contract with Rawson, and it was common ground that “any one event” applied for “each indemnifiable event”.

“Were this not so, then Allianz’s total liability for the more than one hundred homes damaged by the single hailstorm would have been limited to little more than $2 million,” he said.

“The same words on the same page under the heading ‘Deductible’ ($10,000 Any One Event) should be given the same meaning.”

Justice White says as the cover was provided for each Insured Contract there was one claim for each damaged house, not one claim for all damaged houses. He says there is no ambiguity to be resolved in favour of the insured.

“The natural and ordinary meaning of the words of the policy are that Allianz insured Rawson Homes against loss or damage in respect of each Individual Contract up to the limit of the sum insured subject to a relevant or applicable deductible,” he says.

The decision is available here.