AFCA Overrules Insurer in Camper Trailer Damage Case

1

Initially, the camper owner noticed no damage during usage in early November 2023, only to uncover water damage in April the following year. The insurer, RAA Insurance, asserted that the seals of the camper had deteriorated over time, thereby excluding it from coverage under clauses related to "depreciation, wear and tear, rust, corrosion," as well as "deteriorated seals and joints over a number of incidents."

The AFCA reviewed evidence from the insurer's assessor, which included images showing gaps in the seals where they did not align perfectly with the camper body. Despite these submissions, the authority found that the images and other evidence failed to incontrovertibly establish the alleged deterioration. They identified a lack of definitive indicators, such as holes or cracking, that would typically signal such decline.

In the ruling, an AFCA ombudsman remarked that, while deterioration is indeed a gradual process, the insurer did not provide persuasive evidence establishing that deterioration was the primary cause of the damage. The decision placed the burden of proof on the insurer, requiring clear information detailing the condition of the seals and how it led to the damage.

Consequently, AFCA mandated the insurer to approve the claim and arrange for repairs. Should they opt for a cash settlement, a 15% increase over the repair quotation must be paid. This decision underscores the obligation of insurers to substantiate exclusions in policy claims with compelling evidence.

Published:Monday, 9th Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

AFCA Upholds Insurer's Decision on Claimant's Non-Disclosure 12 Jun 2025: Paige Estritori A recent ruling by the Australian Financial Complaints Authority (AFCA) supported Auto & General's decision to deny a motor policyholder's claim after a crash. The decision stemmed from the policyholder's failure to disclose a driving-related good behaviour bond, despite his claims of a learning disability affecting his understanding of the policy's inquiries. - read more

Insurer Ordered to Cover Restaurant Arson Despite Director's Unrevealed Criminal Record 12 Jun 2025: Paige Estritori In a recent decision, the Australian Financial Complaints Authority (AFCA) directed insurer QBE to honour an arson claim for a restaurant, despite the owner's failure to disclose prior criminal convictions during the policy's inception. The restaurant, which operates from a leased location, suffered extensive damage due to an arson attack on August 2 of last year, halting its business operations. While the arsonist was apprehended, QBE initially denied the claim, citing non-disclosure of the director's criminal history. - read more

Insurance Sector Reports $1 Billion Profit Amidst Household Strain 11 Jun 2025: Paige Estritori The insurance industry secured a net profit after tax of $1.11 billion in the March quarter, with major contributions from insurers at $990 million and reinsurers at $123 million, as revealed by the latest data from the Australian Prudential Regulation Authority. The insurance service result, a key indicator of underwriting success, reached $1.32 billion during this period, while investment returns added an impressive $1.18 billion. - read more

ASIC Accuses Choosi Pty Ltd of Misleading Insurance Comparison Practices 10 Jun 2025: Paige Estritori The Australian Securities and Investments Commission (ASIC) has initiated legal proceedings against Choosi Pty Ltd, alleging deceptive practices in its insurance comparison service. The regulatory body charges that from July 2019 to June 2025, Choosi misrepresented its offerings, claiming to compare funeral and life insurance policies from multiple insurers while actually only comparing products from a single provider, Hannover Life Re of Australasia Ltd. - read more

Individual Disability Income Insurance Extends Profitable Streak into Fifth Quarter 10 Jun 2025: Paige Estritori Recent figures from the Australian Prudential Regulation Authority reveal that individual disability income insurance (DII) recorded an underwriting profit of $231 million for the first quarter of 2025, continuing a five-quarter streak of profitability. This performance shows promising growth compared to the December 2023 quarter, which saw an $86 million loss. Although the latest profit is up from $138 million in the last quarter, it still falls short of the $419 million achieved a year before. - read more