Quake Damage Claims Dismissed Over Previous Faults
Quake Damage Claims Dismissed Over Previous Faults
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
Two farmhouses seeking insurance payouts for earthquake damage have had their claims denied, following a decision highlighting the role of pre-existing issues.
The company behind the claim stated that the properties were impacted by a 5.4-magnitude earthquake that occurred in November 2018. Although the earthquake's epicenter was approximately 45 kilometers away from the buildings, Geoscience Australia specified the evident damage radius to be no more than 27 kilometers from the epicenter.
In their defense, the claimant's engineering expert conceded that the buildings were situated outside the primary damage zone but contended that the earthquake’s vibrations had unleashed energy beneath the geological formations on which the houses stood.
The expert identified "preexisting or dormant conditions" in the properties, including previously repaired damage which, according to him, reopened due to ground movement prompted by the quake, also leading to the manifestation of new fractures.
Meanwhile, Allianz, the insurance provider, enlisted a forensic civil and structural engineer who assessed the damages. His findings revealed brickwork fissures in multiple sections of one property, referred to as House H, and evident cracks within the garage of the second property, termed House P, in addition to a separation between a storeroom and the home.
The engineer hired by Allianz attributed the damage to prolonged foundation instability and deterioration of the mortar used in the brickwork, rather than to the seismic event.
The Australian Financial Complaints Authority (AFCA) upheld the insurer’s position, noting that both engineers corroborated the presence of damage similar to what was being contested even before the 2018 earthquake, specifically in House H.
AFCA further mentioned that updates made to certain rooms within the house remained unaffected, while external brickwork conditions pointed towards significant wear and tear, contributing to the losses. Comparable remarks were also made in regard to House P.
"While both experts agree it is conceivable for House H to incur earthquake-related damage under ideal conditions despite its location outside the designated impact radius, the insurer's expert refuted the existence of such conditions in this case," stated the adjudicator from AFCA.
"Even if the earthquake were recognized as being a proximate cause of the damage to House H, it would coexist with other excluded factors (wear and tear, prolonged structural movement)."
"Consequently, the insurer maintains the right to invoke those exclusions as a basis for denying the claim," AFCA concluded.
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Recent rural reporting has pointed to a more encouraging winter moisture profile across parts of the eastern and southern farming regions, with many growers seeing improved crop prospects after a difficult start in some districts. For farm businesses, that is welcome news. Better soil moisture can support establishment, pasture growth and yield potential, but it does not remove the need for disciplined risk planning. - read more
APRA’s latest general insurance performance update points to a market that is in better shape than it was during the recent period of severe claims inflation, reinsurance pressure and weather-related volatility. For allied health practice owners, that is useful context, but it should not be read as a guarantee that every renewal will become cheaper or easier. - read more
Pressure for reform of NSW’s Emergency Services Levy is moving from an abstract insurance-sector issue to a practical cost question for fitness businesses. Recent industry coverage has again highlighted how levies and taxes added to insurance premiums can compound the affordability challenge for small operators, particularly when weather losses and rebuilding costs are already keeping commercial premiums elevated. - read more
Australia’s latest insurance complaints data is a timely reminder that buying cover is only one part of risk management. The figures point to continuing pressure across general insurance, with disputes commonly linked to claim delays, declined claims, communication breakdowns and disagreements over how policy wording should apply. - read more
The commencement of New South Wales’ professional indemnity requirements for registered building practitioners marks a significant compliance shift for the state’s construction sector. From 1 July 2026, relevant practitioners must be indemnified under an insurance policy for work carried out in that capacity, bringing insurance evidence closer to the centre of day-to-day building compliance. - read more
Car safety has come a long way since the early days of motoring. Initially, vehicles had minimal safety features, and accidents often led to severe injuries or fatalities. Over the years, technological advancements have significantly improved the safety of cars, making them much safer for drivers and passengers alike. - read more
Car insurance is an essential part of owning and driving a vehicle, providing protection and peace of mind on the road. While most Australians are familiar with the basic coverage options, understanding the finer details of premium calculations can be quite complex. One of the key factors influencing these calculations is age. - read more
When it comes to protecting your vehicle and your finances, car insurance is a crucial investment. In Australia, car insurance helps cover the costs associated with accidents, theft, and other unexpected events on the road. - read more
Insurance jargon refers to the specialized terminology and phrases used within the insurance industry. These terms can often be confusing and complicated for those not familiar with the field. - read more
Car insurance is a crucial aspect of responsible vehicle ownership. It provides financial protection against accidents, theft, and other unforeseen events. In Australia, having the right car insurance policy can give you peace of mind on the road. - read more
Knowledgebase
Exclusion: Specific conditions or circumstances for which the insurance policy does not provide coverage.
No comments yet. Be the first to share your thoughts.