Compensation granted to complainants for delays in fire claims

Following an Australian Financial Complaints Authority (AFCA) ruling, an underwriting agency has been mandated to pay maximum non-financial compensation and furnish a comprehensive scope of works for a house fire claim. The decision was reached due to the agency’s failure to sufficiently communicate with the homeowners involved.

According to the complainants, they were not adequately informed about the progress of home repairs after filing the claim in January of the previous year. They also stated that they were not given a specific start date for the repairs.

The property owners experienced substantial delays in receiving reimbursement from Blue Zebra for a temporary fence. The agency acknowledged this as an “unfortunate administrative issue” after the fact.

During the hearing, the complainants further revealed that the make-safe repair arranged by the agency had proven ineffective, resulting in water damage and the development of mold.

Blue Zebra stated that the handling of the claim was in accordance with the anticipated procedures for a loss of such magnitude and the involvement of numerous experts.

Blue Zebra confirmed that repairs were approved in July of the prior year and were scheduled to begin once the homeowners agreed to the reinstatement works.

However, the repairs could not proceed due to disagreements between the parties involved.

AFCA disputed the agency’s assessment, asserting that mistakes in their actions and communication “resulted in unjustified delays and interfered with the complainants’ expectation of enjoying peace of mind.”

It brought attention to the “unjustifiable delays” encountered during the installation of temporary repairs following the ineffective initial fixes.

AFCA stated that the insurer acknowledged the complainants’ concerns about the additional brickwork as early as April 2022. However, the insurer only notified the complainants of their decision not to cover the cost in August 2022. AFCA noted that the insurer has not provided an explanation for the significant delay in their response.

The ruling recognized that the extent of damage to the property and disputes with the homeowners could have impacted Blue Zebra’s management of the claim. However, it concluded that the primary cause of the delays was the agency’s inadequate communication.

According to AFCA, the insurer has failed to provide satisfactory evidence demonstrating that the complainants were responsible for any delays in the advancement of the claim.

Despite the disagreements concerning the repair approach, the insurer has not responded to the complainants’ assertion that the repairs could have started even while the matter was being addressed.

AFCA has determined that the complainants will receive the maximum amount of $5400 as compensation for non-financial losses, considering the significant stress and inconvenience they experienced. Additionally, the agency has been mandated to provide a comprehensive scope of works and a timeline for completing the necessary repairs.

The insured individuals also requested reimbursement from Blue Zebra for the premium on a second contents policy they obtained from another insurer, claiming that Blue Zebra had initially agreed to cover it.

AFCA recognized that the claim notes indicated Blue Zebra’s willingness to “review and consider the reimbursement of this premium.” However, it was unclear whether the agency had formally agreed to the arrangement, as per AFCA’s findings.

According to AFCA, it cannot be conclusively determined that the complainants were led to believe that the insurer would cover the second contents policy they purchased. Therefore, AFCA does not believe that the insurer is obligated to reimburse the complainants for the premium of the second contents policy.



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By Ryan

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