A Complainant whose Self Storage Unit was flooded after heavy rain will be compensated for its losses after winning a claims dispute against QBE.
The man filed a damage claim as a beneficiary of the storage facility’s insurance policy, which provided coverage for customer merchandise.
He said the unit was flooded after heavy rains in late February last year and sought to have it covered under a rain water hazard benefit policy.
The QBE did not argue that water had entered the unit, but said the cause was due to the flooding of a nearby river, which was not covered by the policy.
The hydrologist hired by the insurance company, referred to as WT, said the area experienced “extraordinary” levels of precipitation – expected only once every 20 to 50 years – on the days of the alleged event.
WT reported that the storage facility was near the Mooloolah River watershed, which overflowed during the storm.
The report said the river reached a height of 10.8 meters Australian Height (AHD) on February 26, a few hours after the peak rainfall, which was 0.2 meters above the estimated floor level of the volume.
It also highlighted the testimony of an employee who said that water appeared on the back of the property at 7am on February 26th and later entered the property after getting over sandbags.
The Australian Financial Complaints Authority (AFCA) acknowledged WT’s findings that floodwaters inundated the building but said it had something to do with the water that initially overwhelmed the unit.
The AFC noted that the ground height of the property differed on the front and back sides by approximately 0.9 metres, and there was a slight unit drop due to the differences.
She said the evidence from the employee was “unreliable” because the insurance company could not verify that the person was on site at the time of the event, and pointed to discrepancies at the time they reported the loss.
The complainant provided photographs of the front of the site, which showed drains just outside the door of the unit that he said filled after a few days of steady rain.
The AFC said that rainwater was shown to be a possible source of primary water and that the QBE results did not conclusively refute this.
“Considering the peak period of rainfall intensity that occurred several hours before the flood peak, it is likely that storm water runoff occurred and preceded floodwaters into the unit,” the AFC said.
“I am not satisfied with the available information that the damage to the complainant’s belongings was caused by flood waters.”
“This is because I don’t think an insurance company can show floodwater entry before stormwater runoff enters.”
It said the policy had responded to the event and that the QBE had no right to deny the claim.
The complainant also requested compensation for the insurance company’s handling of the claim, saying that it was bad and affected him negatively when he was in a state of vulnerability.
The QBE acknowledged that it had made errors in the process, which it attributed to poor internal communication, but indicated that it had been accommodating to the complainant after learning of his condition.
AFCA did not require the QBE to award non-pecuniary losses, saying it had “reasonably managed the claim”.
The AFC said: “I am not satisfied that the information exchanged shows that the insurance company acted improperly or violated the complainant’s privacy.”
“The insurance company shared the complainant’s information internally to best address the issues raised. In my opinion, its actions were appropriate.”
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