A homeowner whose property was damaged after more than a week of torrential rainfall will be paid out even though the home was not adequately waterproofed. 

The complainant had lodged a claim after heavy rain over the 2023 Christmas period caused water to enter a downstairs area.

Auto & General appointed a builder who suspected the water entered because the property’s external walls were not waterproofed.  

The builder says the walls lacked a physical waterproof membrane and noted that the homeowner had mentioned water entry occurring whenever there was substantial rainfall. 

The property owner says his statement was misinterpreted and that water ingress had only occurred during the claimed storm period.    

The complainant engaged a builder who also suggested that the structure’s waterproofing had failed, and pointed to inadequate site drainage as another reason water was entering through the walls.   

In its ruling, the Australian Financial Complaints Authority panel acknowledged that poor waterproofing likely contributed to the water damage.  

But it says the insurer’s defect exclusion that it relied upon requires that policyholder knew about or “should reasonably have known about” the fault at the time of loss. 

“While the evidence establishes that there was no waterproofing, the panel is not satisfied the insurer has established that the complainant knew about or should reasonably have known about the defects or faults,” AFCA said.  

“This is supported by the fact the complainant only recently purchased the home, and the pre-purchase inspection report made no reference to defects or faults.”   

The authority agreed that the claimed incident was the only occasion when the property experienced water ingress and that the storms were the primary cause of the damage. 

AFCA ruled that it is the responsibility of the claimant, who has since sold the property, to establish the extent of his loss for Auto & General to then pay the claim in accordance with the policy.  

See the ruling here.