Dispute Over Damages Caused by Violent Painters: Homeowners Unable to Increase Insurer's Offer
Homeowners Lose Battle for Higher Compensation After Painter Attack Damages
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.
Homeowners claimed damages from contracted painters who damaged their property during a violent attack.
However, they have lost their challenge to increase their insurer's cash settlement offer of $53,000.
After purchasing the house, renovations were ongoing when a group of painters caused damage to several walls and windows in November 2021. The homeowners lodged a claim with IAG, and the male claimant alleged that the workers had "turned on him" during a meeting over workmanship issues and attacked him before causing damage to the property. The painters were later arrested for assault.
Assessment and Offer from IAG
An assessment from an insurer-appointed builder recommended that the matter be handled with a cash settlement, as repairs might not match the existing texture. The scope of works (SOW) for the repairs quoted by the builder was $13,203 in early December. Despite this, the complainants were not satisfied with IAG's offer, and the insurer's requested the builder to revisit the initial quote. AI updated the initial quote, and IAG offered a cash settlement based on the revised quote in April last year, which the homeowners dismissed again.
They had instead obtained a report from a quantity surveyor, referred to as JB, which stated that AI's SOW was insufficient to cover the rectification works and "not a genuine quotation". JB observed that the property had sustained water and ceiling damage, which led to mold growth. The surveyor quoted a repair cost of $120,000 to $130,000.
However, IAG denied responsibility for the mold or water damage and advised that the complainants would have to file a separate claim for the damage to be assessed. In August, IAG offered to increase its cash settlement by 25%, taking its offer to $24,765, which the claimants also rejected.
Builder's Report and Insurance Settlement Offer
The insurer then engaged a building consultant, referred to as CF, to inspect the property and report on the damage. However, the complainants denied them access. But CF provided a desktop report based on an analysis of the various quotes. The consultant estimated that the repair cost amounted to $39,504, which IAG uplifted with a 20% contingency and fees to cover four weeks of temporary accommodation. This led to the insurer’s offer amounting to $53,000.
The homeowners disagreed that the offered settlement was inadequate since it did not consider rectification works for mold damage, which had worsened due to the insurer's delays. However, the Australian Financial Complaints Authority (AFCA) determined that there had been no evidence to show "a causative link" between the malicious damage and water ingress, leading to mold growth.
"Given that the malicious damage involved scratching and gouging to internal walls and a window frame, the panel on balance considers it unlikely any such link exists," AFCA stated.
The panel further revealed that the delays that led to the mold growth could be attributed to the complainants' failure to provide an itemized counter-quote until mid-June last year, more than seven months after the claim had been lodged. If the homeowners wished to have the mold damage covered, they would have to file a separate claim.
AFCA Ruling
The AFCA acknowledged that IAG's offer was "overall reasonable" and required the insurer to waive the $1000 policy excess. The ruling also stated that IAG's offer for temporary accommodation was fair, despite assessments that suggested it would not be required. The homeowners' request for ten months' worth of accommodation, estimated to cost $23,336, was turned down by AFCA.
In summary, the insurer denied a request by complainants for a higher payout over damages caused by violent painters who were also charged with assault in November 2021. This decision was supported by AFCA, which found IAG's offer reasonable and fair, and the homeowners would need to file a separate claim for mold damage.
Published:Wednesday, 31st May 2023 Source: Paige Estritori
Please Note: If this information affects you, seek advice from a licensed professional.
Insuregroup, a specialist insurance brokerage serving Australia's transport and logistics sector, has recently announced a significant milestone: processing over 10,000 insurance policies since its inception, with a 25% increase in policy volume over the past year. This growth underscores the escalating demand for comprehensive truck insurance solutions tailored to the unique needs of Australian freight operators. - read more
The Australian life insurance sector has reported a substantial after-tax profit of $360 million for the June 2025 quarter, marking a significant increase from the $116 million recorded in the same period the previous year. This impressive growth is primarily attributed to a sharp rise in investment income and improved underwriting performance across key product lines. - read more
The Australian life insurance industry is witnessing a significant surge in mental health-related claims, reflecting broader societal challenges and increasing awareness of mental health issues. AIA Australia, a leading life insurer, has reported that mental health claims now account for 23% of its total claims, up from 15% in 2014. This trend underscores the growing prevalence of mental health conditions and their impact on individuals' ability to work and maintain financial stability. - read more
Recent data indicates a notable decline in life and income protection insurance premiums across Australia, providing consumers with more affordable coverage options. According to the latest Direct Life Insurance Report from Rainmaker Information, direct life premiums have decreased by 7% since 2024. Similarly, direct income protection premiums have seen significant reductions, with average premiums for waiting periods of 30 days and 90 days decreasing by 12% and 13%, respectively. - read more
Club Marine, Australia's largest recreational boat insurer, is celebrating its 65th anniversary in 2024. Since its founding in 1959 as Marine Hull & Liability, the company has grown from a small operation in Victoria to a nationwide provider of insurance services for the country's boating community. - read more
When you’re young, life is all about new experiences and making plans for a promising future. While factors like travel, career, and relationships often take centre stage, one aspect often overlooked is life insurance. It might seem like something to consider later in life, but starting a policy while you're young can be a savvy financial move. - read more
Life insurance can seem complex at first, but understanding the basics can help demystify this important financial product. At its core, life insurance is a contract between you and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon your passing, in exchange for premium payments. - read more
Life insurance is a crucial part of any comprehensive financial plan, providing peace of mind that your loved ones will be financially secure in the event of your passing. - read more
Welcome to a pivotal guide dedicated to empowering you with the essentials of income protection insurance in Australia. As we navigate through times of uncertainty, safeguarding your financial wellbeing becomes not just a priority, but a necessity. Income protection insurance stands as one of the key pillars of financial security, ensuring a steady flow of income during periods when you're unable to work due to illness or injury. - read more
Life insurance is an essential safety net for families, providing financial security when it's needed the most. As your family grows, the importance of having a well-structured life insurance policy becomes even more critical. In the busy lives we lead today, it’s easy to overlook this crucial aspect of financial planning. However, ensuring your coverage meets your family's evolving needs is vital. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Beneficiary: The person or entity designated to receive the death benefit from a life insurance policy.
