AFCA Rules in Favour of Owners in Lift Vandalism Dispute

2

The issue dates back to 2018 when the owners lodged a claim after multiple hydrants were deliberately opened, causing water damage to the lifts. Although the lift manufacturer and maintenance consultants recommended replacing the hoist ropes, Chubb’s assessor did not initially approve this part of the claim.

After a scope of work was agreed upon, the cables were placed on a "watchlist" due to anticipated further deterioration caused by water exposure. In 2019, consultants reiterated concerns of moisture-related damage, urging restoration to the lifts’ original state. Consequently, the replacement work for the hoist ropes was completed in 2020, with the owners claiming the expenses under the initial policy.

Chubb contested the claim, stating that "direct physical damage" from a "sudden and accidental" cause is required for policy application. They argued the cable damage resulted from insufficient lubrication and prolonged use, not the earlier vandalism.

According to Chubb, their appointed consultant found no concrete evidence of water causing damage to the main hoist ropes. However, AFCA’s ruling challenged this stance, citing inconsistencies in the maintenance records and earlier assessments acknowledging water exposure.

The AFCA panel expressed skepticism about Chubb’s theory of overuse leading to the cable damage, finding the insurer’s expert report unsubstantiated by technical or scientific testing. Instead, the ruling recognized the significant water event of 2018 as the probable cause, aligning with the insurable event criteria of the policy.

An AFCA ombudsman articulated doubt over Chubb's exclusions explaining the damage, remarking on the absence of convincing counter-evidence. As the conditions of policy exclusions were not sufficiently proven, AFCA concluded that the water event was the leading cause of damage, fulfilling the policy’s terms.

Published:Friday, 28th Mar 2025
Source: Paige Estritori

Share this news item:

Insurance News

AFCA Rules in Favour of Owners in Lift Vandalism Dispute 28 Mar 2025: Paige Estritori In a landmark decision, the Australian Financial Complaints Authority (AFCA) has mandated that Chubb Insurance replace the hoist ropes of two lifts in an apartment block, following damage attributed to vandalism. The owners' corporation successfully argued that the damage to the lifts was part of a previously recognized vandalism incident. - read more

NSW Government Targets Predatory Practice of Claim Farming 28 Mar 2025: Paige Estritori The New South Wales Government is taking decisive action against 'claim farming', a predatory practice that exploits vulnerable individuals by pressuring them to file compensation claims. This practice often involves unethical tactics targeting susceptible groups, including child abuse survivors. To combat this, the government is set to introduce the Claim Farming Practices Prohibition Bill 2025. - read more

RAA Partners with Duck Creek for Major Tech Overhaul 27 Mar 2025: Paige Estritori The Royal Automobile Association (RAA), a leading motoring group in South Australia, is set to revamp its technology infrastructure by adopting Duck Creek's OnDemand cloud platform. This strategic transition will see RAA's outdated systems for motor and home insurance transformed to include streamlined policy, rating, billing, and claims management, as well as enhanced data handling and insights capabilities. - read more

Consumer Advocates Criticise Insurers Over 'Poverty Premiums' and 'Loyalty Taxes' 26 Mar 2025: Paige Estritori Consumer advocacy groups have voiced strong opposition to the insurance industry's decision to reject recommendations designed to eliminate practices that disadvantage consumers, including charging higher rates for monthly bill payments and increasing renewal premiums for loyal customers. The Financial Rights Legal Centre has cited ongoing reports from consumers being adversely affected by these pricing practices, which they refer to as a 'poverty premium' and a 'loyalty tax.' - read more

Urgent Reforms Needed to Curb Rising Motor Insurance Premiums 25 Mar 2025: Paige Estritori The Insurance Council of Australia (ICA) has called for urgent action to address the factors driving the significant rise in motor insurance premiums. In a detailed policy paper, the ICA has outlined a strategic plan, urging government intervention to address key issues like labour shortages, supply chain disruptions, and inefficiencies in accident management practices. - read more

Car Theft Claims Skyrocket, Raising Insurance Concerns 24 Mar 2025: Paige Estritori The Insurance Council of Australia has unveiled substantial data revealing that the expense related to vehicle theft claims has almost doubled since 2015. Last year, the industry handled $428 million in claims, signaling a stark increase from $218 million a decade ago. The data comes from Insurance Statistics Australia, which has adjusted historic dollar values for inflation, highlighting an urgent trend in rising car crime claims. - read more