A roof-damage claim filed against Hollard has been upheld after it was found that the online insurance application process failed to clearly indicate that the use of asbestos was to be disclosed.
The applicant chose iron when a drop-down menu only provided the ability to select just one option, because their building report indicated this as the main material used in the roofing.
The insurance company claims “other” should have been chosen considering that there were several building materials, and that the form included provision for additional information under the “description” field.
The Australian Financial Complaints Authority (AFCA) notes that it is possible for a person to select “other” if the drop-down list did not include the main type of roofing, and would then consider using the description box to specify the material.
“In addition, and of significance, I do not accept a reasonable person in the complainant’s circumstances could have been aware that any asbestos in the roof was a matter relevant to the insurer’s assessment of the risk,” AFCA’s adjudicator states.
‘Does the roof have any asbestos?’
AFCA further notes that there’s no simple question like “does the roof have any asbestos?” to clearly show its presence was to be disclosed.
“As the insurer says it will not insure any property with asbestos in the roof, a simple question to this effect should have been asked,” it says.
“This would remove any doubt to a reasonable person about its importance to the insurer’s assessment of the risk. “
The insured’s building inspection report describes asbestos in an area over the office with the remaining part of the building being constructed using steel framing and corrugated iron.
A loss adjuster report shows less than half of the roof is made of asbestos.
The ruling which could not find any fault with the broker, has ordered Hollard to indemnify the complainant for its claim, with the overall payment including interest in case the claim is settled in cash.
The information contained in this article is of a general nature only. It does not take your specific needs, objectives or circumstances into consideration, and is not financial advice, legal advice or otherwise a recommendation to purchase any financial product or insurance policy. You should seek your own independent financial advice from a qualified financial and insurance adviser before making any financial decisions, and seek your own independent legal advice from a qualified solicitor before making any decisions of a legal nature.