Insurance dispute about flood repairs
Mr and Mrs Chen* said flooding caused damage to their house foundations, but the insurer declined to include this in their scope of repairs.
Mr and Mrs Chen* said flooding caused damage to their house foundations, but the insurer declined to include this in their scope of repairs.
Mr and Mrs Chen* held insurance on their house. In January 2023, the Auckland region was affected by widespread flooding, and the house was damaged as a result. Mr and Mrs Chen made a claim to their insurer for the damage.
The insurer accepted the claim, however a dispute arose in relation to the scope of the damage. Mr and Mrs Chen said there was damage to the foundations from the flooding, but the insurer declined to include this in the scope of repairs. Mr and Mrs Chen also said the insurer had service issues and delays while dealing with their claim.
The IFSO Scheme investigated. To be covered by the policy, Mr and Mrs Chen needed to prove that the foundation damage was "sudden", which it could be if it was a direct result of the flooding.
The insurer had a report from a structural engineer, who stated that all floor level variations measured across the dwelling existed at the time of the last renovation and redecoration works. There was no indication of sudden floor settlement.
Mr and Mrs Chen produced their own report from a structural engineer, who said it was not possible to give a definitive cause of the damage, but that it was possible water pressures could have upset the foundations.
This was not sufficient to confirm that the foundation damage was caused by the flooding, particularly as both experts had noted there had been issues with floor levels prior to the flood. Therefore, the IFSO Scheme found that the insurer was not required to include the foundation repairs in the scope of work.
There had been some delays in Mr and Mrs Chen's claim, however, in the context of the extensive nature of the flooding, which impacted insurers' ability to respond quickly and effectively to claims, the IFSO Scheme did not believe this meant the insurer had significantly breached the Fair Insurance Code.
The IFSO Scheme was unable to uphold the complaint.
Complaint not upheld
* Name has been changed
House insurance generally provides cover for sudden damage or loss, and only very limited cover for gradual damage. This usually means when someone makes a claim under a house insurance policy, it is up to them to prove they have suffered sudden damage or loss.