- Claim Guide
These Mistakes Cost Customers At AFCA
- AFCA complaints
Why genuine claims can lose at AFCA
Genuine complaints lose at AFCA when customers don’t know what they’re doing.
AFCA can only make a decision based on the quality of arguments, evidence and facts presented to them. So, when customers are up against insurers’ AFCA specialist teams, genuine claims can lose out.
Below, we’ve reviewed a few AFCA determinations that went the insurer’s way and explained why the customer lost, and what could have been done differently.
AFCA Determination 1010793 – Leaking shower exclusion upheld
1. The complaint
The complainant claimed for water damage from an upstairs bathroom. The insurer initially accepted part of the claim, then denied the bathroom itself, relying on the policy exclusion for water escaping from a shower recess. The complainant argued that because the claim was accepted, all damage should be covered.
2. The decision
AFCA assessed where the water came from and then applied the policy exclusion. AFCA accepted the insurer’s plumber evidence that the shower recess had failed and caused the damage.
- “The only [test] that failed was the flood test of the shower recess.”
- “No other expert opinion was provided.”
Once causation was accepted, AFCA applied the exclusion:
“The damage was from water escaping from a shower recess.”
3. Why they lost
It seems the complainant focused on the unfairness of the insurer accepting the claim and later declining it, instead of proving the real issue, which was whether the shower caused the damage.
Without independent expert evidence to challenge the insurer’s plumber, AFCA had little choice but to rely on the insurer’s evidence. That failure to investigate other possible causes of damage is what ultimately cost the complainant the case.
There was also likely scope to pursue non-financial loss compensation for the insurer’s incorrect acceptance and poor handling of the claim, even though the damage itself was excluded. However, the customer didn’t raise this as part of their complaint, so AFCA didn’t consider it.
AFCA Determination 866158 – Matching flooring not covered
1. The complaint
The complainant had water damage to part of the lounge floor from a leak in a wall cavity. The insurer accepted the claim and cash settled. The complainant sought further payment to replace flooring throughout the home so the floors would match. The insurer said matching undamaged flooring was excluded under the policy.
2. The decision
AFCA accepted that the policy did not cover matching flooring in undamaged areas and that the insurer only had to pay to repair the damaged section of flooring. AFCA found the complainant had not shown that broader replacement was required under the policy.
- “The PDS does not provide for replacement materials to match the undamaged parts of the house in order to create a uniform appearance.”
- “Nothing has been provided to show that this is required under the terms of the policy.”
3. Why they lost
Matching is often one of many available arguments to justify an increase in scope for undamaged flooring. For example, it seems the customer failed to consider (or support with evidence):
- Whether removing undamaged flooring would itself cause damage as part of repairing the damaged section
- Whether there was damage beneath the floorboards, such as water damage to subfloor materials, that meant partial replacement was not possible
- Whether the flooring system was no longer compliant with current building standards, meaning a compliant repair required full replacement rather than patching
Without technical or expert evidence to show that partial replacement was not reasonably possible, AFCA was left with the policy wording, which clearly excluded matching undamaged areas.
AFCA Determination 878737 – Wear and tear exclusion upheld
1. The complaint
The complainant claimed for internal water damage to the master bedroom and kitchen after heavy rainfall. The insurer denied the claim, relying on exclusions for wear and tear and gradual deterioration. The complainant said the home had not leaked before, the roof was generally well maintained, and the rainfall was significant.
2. The decision
AFCA accepted the insurer’s expert evidence that water entered through deteriorated roof components rather than storm damage and that exclusions applied.
- “CN’s findings are supported by photos in its report”
- “There is no evidence to dispute CN’s conclusion the water likely entered the property through these areas”
AFCA concluded:
- “The likely cause of water entry… was due to the screw, rusted apron flashing and deteriorated dektite.”
3. Why they lost
This case turned on proximate cause, and the complainant did not properly challenge the insurer’s theory of ingress. There were some obvious lines of argument that were not developed with evidence:
- What if the alleged points of ingress were wrong? Insurer experts often identify convenient defects, but that does not mean they have correctly identified the actual path of water entry. Without independent expert evidence to test or rebut the insurer’s conclusions, AFCA accepted the insurer’s version of events.
- What if the storm was so significant that water would have entered regardless of minor wear and tear? Even where wear and tear exists, the proximate cause can still be the storm if the rainfall or wind-driven rain was abnormal and the damage would not have occurred but for the event.
None of these causation arguments were raised or supported with expert evidence, so AFCA was left with the insurer’s reports and applied the exclusion.
Final Thoughts:
AFCA is not a silver bullet. It can be a powerful pathway when an insurer has genuinely got it wrong, but unless that is proven with strong arguments and convincing evidence, genuine claims end up falling short.
AFCA will not rebuild your case for you. It will assess what is put in front of it. If the evidence is thin, the causation arguments are unclear, or the policy wording does not support your position, AFCA is unlikely to step in, even if the insurer’s conduct has been frustrating.
The strongest AFCA complaints are the ones that are prepared like a case, not a rant. Clear facts. The right evidence. A proper understanding of the policy and the law.
That is what gives you a real chance of success.