Property owner wins storm claim dispute over leaking skylight

A homeowner who challenged his claim denial after torrential rain damaged his home has won his dispute following an Australian Financial Complaints Authority (AFCA) decision.

The complainant lodged a claim on March 10 last year after weeks of significant downpours during the catastrophic flooding event in NSW and Queensland.

Records from a weather station near the claimant’s home showed that between March 1 and 9, up to 533.9mm of rain had fallen, with 137.4mm recorded on the day before the claim’s lodgement.

The man said that the storm’s severity damaged several parts of his home, including the roof and skylight, which had been leaky and caused water ingress, as well as floorboards in the kitchen and lounge room that had lifted off and buckled.

Youi disputed the claimant’s assessment, saying the roof had not been damaged and that water entered the building from the skylight because it was improperly maintained. It said the home had inadequate subfloor drainage and design, which caused the floorboards to “tent”.

An insurer-appointed roof tiler said the roof had been in an “average” condition but noted that the sealant around the skylight had degraded. The tiler resealed the area and attributed the water entry to its poor maintenance.

Youi also engaged with a builder, referred to as IH, who observed dampness in the ground beneath the subfloor of the property.

IH noted that the subfloor ground level had been lower than the exterior ground level, allowing for the possibility for water to “migrate into the subfloor.” The builder said that moisture would typically be absorbed by floorboards which would cause it to lift.

IH highlighted that regulatory standards required a 10mm gap between floorboards and an adjacent wall. It said this was not present at the complainant’s home, resulting in the “tenting” effect as the boards had “nowhere else to move”.

AFCA agreed with Youi’s assessment that there was no “persuasive evidence” to show that the storm damaged the roof but said that the insurer should cover damage caused by water entry from the leaky skylight after acknowledging the policy provided cover if the policyholder was not aware of the issue.

“To the extent, water entered the home through the skylight and caused damage, I accept this is covered by the policy,” AFCA said.

“The insurer does not cover water entry, unless it enters through an opening created by the storm. There is an exception which applies if the insured person could not reasonably have known about it.”

It accepted an assessment from Youi that the repair cost to the water ingress had been less than the policy excess, which was $1225.

AFCA determined that IH’s report failed to show that the “tenting” effect was caused by gradual wear and tear of the subfloor, saying there was a lack of evidence consistent with long-term damage, including rising dampness and seepage.

“There is no apparent dispute some form of excessive moisture caused damage to the floorboards,” AFCA said.

“IH accepts water entered this space during ‘prolonged and torrential rain events. This is consistent with a storm event.

“The exchanged information shows the floorboards ‘tented’ almost immediately after the storms. I am satisfied the reported damage is consistent with there being excessive moisture present. On balance, I accept water from the storm events was the cause of this damage.”

The ruling required Youi to cover the interior damage to the home by either conducting repairs or cash-settling the claim with a contingency uplift of 15%.

It also awarded the complainant $500 for non-financial losses after he experienced an “unusual degree or extent of stress, inconvenience and delay,” with the insurer’s handling of the claim.

Click here for the ruling.