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The salon owner, who ran her business from the upper level of a commercial building, initially registered two separate claims with Chubb Insurance due to extensive damage incurred from a storm characterized by heavy rainfall and flooding events. Her first claim, connected with the actual flooding, was denied based on the absence of a flood damage clause in her insurance policy – a decision she did not contest.
Controversy emerged with her second claim, which sought compensation for damages pertaining to her business contents ravaged by black mould following moisture accumulation in the carpet. Chubb Insurance rejected this claim too, attributing the mould to the same flood-related conditions and a subsequent failure in the building's ventilation systems.
The insurer's own assessors inferred that the location's closeness to the ground-floor flood and a deficit in proper drying methods were key factors in mould formation. Further backing their position, the insurer's mould remediation expert hinted that extended humidity levels due to the flood, coupled with power outages that inhibited standard ventilation, contributed to the mould predicament.
The salon owner, however, put forth an alternative perspective: the surplus rainwater had entered through the balcony doors, pre-dating any damage reported on the lower floors. This assertion was fortified by a specialist hydrologist's examination of the extreme weather patterns experienced, as well as corroborating accounts from eyewitnesses once site access was granted.
Conflict arose with the declarations from an insurer-sponsored builder who dismissed the possibility that water penetration from the said doors was liable for the moisture that led to the mould damage. This counterpart remarked on the satisfactory condition of the door's mechanisms and their role in averting water ingress.
However, the Australian Financial Complaints Authority panel cast doubts on the builder's deductions, especially after reviewing videotaped evidence showcasing the door's susceptibility to be forced open despite being locked – a scenario considered probable under the vigorous winds accompanying the rainstorm.
The panel reached a consensus that the damages ensued from a complex interplay of factors; although flood damage played a significant role in escalating moisture levels at the upper tier, storm-induced water invasion through the balcony doors also visibly contributed to the unfortunate circumstances involving the carpet.
The resolution dictated by the panel was a balanced one. Unable to assign absolute blame for the damage between storm-induced ingress and flooding, the decision was to recognize Chubb Insurance's liability for 30% of the diagnostic loss connected with the waterlogged carpet. The claimant brought forth a claim totalling $777,132 for the lost articles, exceeding the sum insured, and the insurer was recommended to settle for 30% of the cataloged loss to the upper limit of the $604,000 insurance coverage.
Additional elements of the ruling mandated the insurer to remunerate the claimant for losses stemming from ruined refrigerated commodities consequential to the power outage – discounting the expert's view that the outage itself was flood-generated – and to foot 30% of the expense involved in preparing the claim, maxed out at a figure of $25,000. Moreover, Chubb was advised to compensate any extra interest incurred due to the claim.
Published:Sunday, 24th Mar 2024
Source: Paige Estritori
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