AFCA Overrules Insurer in Camper Trailer Damage Case

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The Australian Financial Complaints Authority (AFCA) has ruled that a camper trailer owner will receive coverage for water and mould damage after the insurer could not demonstrate that the wear and tear exclusions applied under the policy.

The case emerged after a storm in November 2023, which the claimant says caused severe wind to rip the cover off the camper, allowing water ingress and subsequent mould development.

Initially, the camper owner noticed no damage during usage in early November 2023, only to uncover water damage in April the following year. The insurer, RAA Insurance, asserted that the seals of the camper had deteriorated over time, thereby excluding it from coverage under clauses related to "depreciation, wear and tear, rust, corrosion," as well as "deteriorated seals and joints over a number of incidents."

The AFCA reviewed evidence from the insurer's assessor, which included images showing gaps in the seals where they did not align perfectly with the camper body. Despite these submissions, the authority found that the images and other evidence failed to incontrovertibly establish the alleged deterioration. They identified a lack of definitive indicators, such as holes or cracking, that would typically signal such decline.

In the ruling, an AFCA ombudsman remarked that, while deterioration is indeed a gradual process, the insurer did not provide persuasive evidence establishing that deterioration was the primary cause of the damage. The decision placed the burden of proof on the insurer, requiring clear information detailing the condition of the seals and how it led to the damage.

Consequently, AFCA mandated the insurer to approve the claim and arrange for repairs. Should they opt for a cash settlement, a 15% increase over the repair quotation must be paid. This decision underscores the obligation of insurers to substantiate exclusions in policy claims with compelling evidence.

Published:Monday, 9th Jun 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Knowledgebase

Proximate Cause:
The primary cause of loss in an insurance claim, which sets in motion a chain of events leading to the damage or injury.

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