A property owner has lost her bid for a payout after the industry ombudsman ruled vibrations do not constitute an “impact” on a home.

The insured lodged a claim saying shaking from construction work at a neighbouring property caused cracking throughout her home and swimming pool, and this should count as impact damage.

But the claim was rejected by Auto & General, which said the problems were “caused by vibration-related settlement and gradual movement, rather than by an insured event of impact at the home”.

The claimant argued the term impact at the home should be interpreted broadly, pointing to the “non‑exhaustive wording” of the clause in her policy, the inclusion of construction-related examples and the “absence of any express exclusion for vibration”.

But the insurer said impact required direct physical contact, such as a vehicle, falling tree or debris hitting a home.

It also noted the cracking was consistent with normal settlement and age‑related movement, which were excluded under its policy.

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Auto & General produced reports from its appointed builder and an engineer that found long‑term foundation movement was the dominant cause.

Vibration from the construction was considered, but the engineer said it was unlikely to have materially contributed to the damage.

In a dispute ruling, an Australian Financial Complaints Authority ombudsman said: “Even if the neighbouring works caused the damage, the mechanism is described as vibration compaction, ground movement.

“These are indirect forces propagated through the earth. They are not caused by an impact ‘at the home.’

“On a fair and reasonable construction of the policy, ‘impact’ requires a discrete event involving physical contact between an external object and the ‘home’.

“I am satisfied the claimed damage does not meet this description.”

The insured also sought compensation for Auto & General’s claim handling, but the authority says the company “assessed the claim promptly, relied on appropriate expert advice and correctly applied the policy terms to deny the claim.

“There is no evidence of unreasonable delay, poor service or exceptional distress beyond normal claim dispute inconvenience.”

See the ruling here.