Quake Damage Claims Dismissed Over Previous Faults
Quake Damage Claims Dismissed Over Previous Faults
The company behind the claim stated that the properties were impacted by a 5.4-magnitude earthquake that occurred in November 2018. Although the earthquake's epicenter was approximately 45 kilometers away from the buildings, Geoscience Australia specified the evident damage radius to be no more than 27 kilometers from the epicenter.
In their defense, the claimant's engineering expert conceded that the buildings were situated outside the primary damage zone but contended that the earthquake’s vibrations had unleashed energy beneath the geological formations on which the houses stood.
The expert identified "preexisting or dormant conditions" in the properties, including previously repaired damage which, according to him, reopened due to ground movement prompted by the quake, also leading to the manifestation of new fractures.
Meanwhile, Allianz, the insurance provider, enlisted a forensic civil and structural engineer who assessed the damages. His findings revealed brickwork fissures in multiple sections of one property, referred to as House H, and evident cracks within the garage of the second property, termed House P, in addition to a separation between a storeroom and the home.
The engineer hired by Allianz attributed the damage to prolonged foundation instability and deterioration of the mortar used in the brickwork, rather than to the seismic event.
The Australian Financial Complaints Authority (AFCA) upheld the insurer’s position, noting that both engineers corroborated the presence of damage similar to what was being contested even before the 2018 earthquake, specifically in House H.
AFCA further mentioned that updates made to certain rooms within the house remained unaffected, while external brickwork conditions pointed towards significant wear and tear, contributing to the losses. Comparable remarks were also made in regard to House P.
"While both experts agree it is conceivable for House H to incur earthquake-related damage under ideal conditions despite its location outside the designated impact radius, the insurer's expert refuted the existence of such conditions in this case," stated the adjudicator from AFCA.
"Even if the earthquake were recognized as being a proximate cause of the damage to House H, it would coexist with other excluded factors (wear and tear, prolonged structural movement)."
"Consequently, the insurer maintains the right to invoke those exclusions as a basis for denying the claim," AFCA concluded.
Published:Thursday, 1st Aug 2024
Source: Paige Estritori
Share this news item:
| Strata Communities Endorse Call for Enhanced Resilience Reforms 15 Feb 2026: Paige Estritori Strata communities are at the forefront of Australia's resilience battle, facing escalating costs, declining coverage, and prolonged recovery periods following disasters. Strata Community Association Australasia (SCA) has expressed strong support for the Insurance Council of Australia's (ICA) recent call for coordinated, long-term resilience reforms to protect communities from these challenges. - read more |
| Artificial Intelligence Revolutionises Australian Insurance Sector 15 Feb 2026: Paige Estritori The Australian insurance industry is undergoing a significant transformation, with companies increasingly integrating artificial intelligence (AI) into their operations. This shift aims to enhance efficiency, improve customer service, and strengthen risk management practices in a rapidly evolving market. - read more |
| Australian Insurers Confront Financial Risks Amid Climate Change 15 Feb 2026: Paige Estritori Climate change is increasingly impacting the Australian insurance industry, presenting significant financial risks as the frequency and severity of natural disasters escalate. Insurers are grappling with the challenge of adapting to this new reality while maintaining financial stability and providing affordable coverage to consumers. - read more |
| Budget Direct Triumphs as 2026 Insurer of the Year 15 Feb 2026: Paige Estritori Budget Direct has been honoured with the inaugural 'Insurer of the Year' title at the 2026 Finder Provider of the Year Awards, marking a significant achievement in the Australian insurance sector. This accolade underscores the company's commitment to delivering exceptional value and service to its customers. - read more |
| Protecting Your Legacy: Estate Planning and Life Insurance for Australians When thinking about the future, it's essential to have a comprehensive strategy that ensures the well-being of your loved ones and the security of your assets. Estate planning and life insurance are two critical pillars in safeguarding your family's financial stability. Despite the complexity often associated with these topics, understanding their importance and implementing them correctly can provide immense peace of mind. - read more
|
| How Pre-Existing Conditions Affect Your Income Protection Insurance Options Income protection insurance is a type of insurance policy designed to provide you with a continuous flow of income in case you are unable to work due to illness or injury. It's a safety net that helps ensure you can maintain your standard of living, even when unforeseen health issues arise. - read more
|
| The Importance of Life, Trauma and Income Protection Insurance for Families When it comes to protecting your family's financial future, understanding the basics of life, trauma, and income protection insurance is crucial. These insurance types provide a safety net during challenging times and offer peace of mind for families. - read more
|
| Trauma Cover: Calculating Adequate Protection for Life's Unexpected Moments The financial fabric of our lives consists of both planning and safeguarding against the unforeseen. Trauma cover, a lesser-known but crucial aspect of personal insurance, provides this protection by offering a lump sum payment upon diagnosis of specific serious illnesses or injuries. In the tapestry of financial planning, it acts as a vital safety net, ensuring that unexpected health crises do not lead to monetary distress. - read more
|
The amount of risk or liability covered for an individual or entity by way of insurance services.