Youi will have to pay more than $115,765 to a homeowner for storm damage after he challenged its assessment that inadequate drainage systems allowed water to seep under his home.

The homeowner filed a claim last April for water damage to his flooring.

Up to seven rooms were affected by the issue, which the homeowner attributed to more than 1148mm of rain falling over a 13-day period.

He noted the property had not previously experienced flooring issues since being built in 2007.

Youi’s builder said the damage resulted from moisture absorption into the timber subfloor, leading to fixture failure. The builder estimated the cost of repairs at $96,470.

The insurer also engaged building consultants who reported a “lack of suitable drainage to the perimeter of the residence” that let heavy rainfall enter the subfloor and caused particleboard flooring “to swell and delaminate over a long period of time”.

Youi initially declined the claim on the basis its policy excluded losses caused by “rising damp or seepage of water from the ground”.

The claimant said such seepage was impossible since the building was elevated.

The insurer then re-engaged the building consultants and found the subfloor drainage system did not meet 2022 building code standards.

However, in a dispute ruling, the Australian Financial Complaints Authority says Youi needed to prove the building was non-compliant with the construction code when it was made, in 2007. It says the insurer has not done this.

AFCA says a report by the claimant’s plumber, noting water could flow freely beneath the home, is more convincing.

The authority notes the claimant has requested a cash settlement and says the insurer should offer a 20% uplift “for the transfer of risk”. 

Youi must also pay for temporary accommodation while repairs are conducted and pay $4000 compensation for stress and inconvenience caused by its claim handling.

See the ruling here.