Quake Damage Claims Dismissed Over Previous Faults
Quake Damage Claims Dismissed Over Previous Faults
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Two farmhouses seeking insurance payouts for earthquake damage have had their claims denied, following a decision highlighting the role of pre-existing issues.
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.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
APRA’s latest life insurance performance data has put income protection back under the spotlight, with disability income products continuing to be one of the more closely watched areas of the sector. While the broader life insurance industry has been showing signs of improved stability, the update reinforces that policies designed to replace income after illness or injury remain sensitive to claims experience, pricing, and changing work and health trends. - read more
Australia’s latest severe weather preparedness messaging from the insurance sector is a timely reminder that boat owners face a different risk profile to many households. Storms, flood surge, hail, cyclonic winds and marina damage can all affect vessels well before a skipper has a chance to move them. For owners in Queensland, New South Wales, Western Australia and the Northern Territory in particular, the lead-up to summer is not just a maintenance checkpoint; it is a financial protection checkpoint. - read more
Fresh complaints reporting from the Australian Financial Complaints Authority has given professional service firms another reminder that client dissatisfaction can become a serious balance sheet risk long before it turns into formal litigation. While the headline numbers are most closely watched by banks, insurers, superannuation trustees and financial advisers, the lesson is broader for any business that sells expertise, advice or technical judgement. - read more
Australia’s latest notifiable data breach reporting has again underlined a risk that real estate agencies cannot afford to treat as an IT issue alone. Malicious activity, compromised credentials, phishing and human error continue to feature prominently in privacy incidents across the economy, and agencies hold exactly the kind of personal information that can make them attractive targets. - read more
Recent consumer guidance has put cruise holidays back under the travel insurance microscope, with Australian travellers being reminded that a cruise is not always treated the same way as a standard land-based trip. While many people assume a general policy will automatically protect them once they board, cruise travel can involve its own conditions, limits and exclusions. - read more
Australia's agricultural sector stands as a testament to the resilience and ingenuity of its farmers. Yet, this stalwart industry faces one of its greatest challenges: climate change. Rising temperatures, erratic weather patterns, and extreme events, from droughts to floods, are now common hurdles on the landscape of Australian farming. - read more
Risk mitigation is a strategy used to prepare for and lessen the effects of potential risks faced by rural farmers. It involves identifying potential threats and taking proactive steps to minimize their impact. - read more
Welcome to our in-depth exploration of Machinery Breakdown Insurance—a safety net that's becoming increasingly important for the modern Australian farmer. Whether you're involved in cropping, dairy, or livestock, your equipment is the backbone of your operation. As farming technology evolves, the machinery becomes more sophisticated, and unfortunately, the more complex a system is, the more that can go wrong. This is where Machinery Breakdown Insurance comes into play. - read more
Welcome to our discussion on farm insurance, a crucial subject for every Australian farmer. Whether you're seasoned in agricultural ventures or just starting out, the world of insurance can often seem daunting and complex. - read more
If you are running a farm, you already know that it is more than just a business; it's a way of life. Your farm is a culmination of hard work, valuable resources, and significant financial investments. - read more
Knowledgebase
Actuary: A professional who analyzes the financial costs of risk and uncertainty using mathematics, statistics, and financial theory.
No comments yet. Be the first to share your thoughts.