Banking royal commission: storm victims tell insurance horror stories

Two storm victims have told the royal commission of the “shambolic” response of insurer Youi to their damage claims.

“It’s an absolute shambles,” Airlie Beach resident Glen Sutton said of his experience with insurer Youi. Pic: Stuart McEvoy

A woman whose house and family were under threat from lead poisoning was prevented from fixing the contamination after insurer Youi failed to repair the home after a freak hailstorm.

It was one of two tales of Youi’s shambolic responses to home insurance claims picked through today at the royal commission, which is probing the insurance industry’s response to natural disasters.

Sascha Murphy, who lives in the NSW mining town of Broken Hill with her husband and four children, told the commission her house has still not been fully repaired after the November 2016 hailstorm. She said lead contamination remediation of her home, which has been contingent on repairing the destroyed and contaminated roof of her house, has yet to take place.

Separately, the royal commission heard that Queensland resident Glen Sutton, whose home was rendered unlivable after Cyclone Debbie tore through the state in March 2017, is still waiting for repairs to start on his home after fighting with Youi for a year and a half.

Youi, a budget insurance company and one of the fiercest competitors to Australia’s biggest insurers, is owned by South Africa’s Rand Merchant Investment Holdings and entered Australia in 2008.

Ms Murphy, who said she lived in a “tiny” three bedroom house, said dealing with Youi was “stressful” and left her feeling “powerless” at times. “We felt like we were butting our heads against a wall,” she told the royal commission.

Broken Hill in NSW.

Broken Hill, which has two large mines close to the town, has issues with lead contamination, and Ms Murphy said two of her children recorded above the prescribed levels of lead in their systems, which prompts more regular tests.

After her five-year-old daughter again tested above safe levels, the Environmental Protection Authority informed Ms Murphy her backyard would have to be dug up and replaced.

However, after a freak hailstorm left her car “like a golf ball” and destroyed the roof of her house, which then needed to be replaced, Ms Murphy was told the EPA couldn’t remediate her backyard until the repairs on her house were finished, as the dust trapped in the roof would re-contaminate the site.

It took until October 2017 for builders to be sent to the house, but when the structural issues were too great for the money Youi had budgeted for the repairs, the builders downed their tools and left the home without part of its roof, an air conditioner or an exhaust for the bathroom.

“We had to open our windows and doors and that was not ideal because that meant more lead dust was getting in the house,” Ms Murphy said. “It was scary. My children were too scared to sleep in the house,” she said.

The builders contracted to work on the house had also failed to tell Youi about the lead contamination and the urgency of the repairs, but the company failed to take action before rain resulted in further damage to the inside of the property.

It took until May 2018 for the roof to be replaced, although “a couple of issues came up and they’re still getting fixed” and the internal damage is still yet to be fully repaired, Ms Murphy said.

“I felt like we had to constantly check everything. We had to stay on their case. We had to really assert ourselves and what we thought was the damage from the event,” she said.

“Hopefully something can come from this and they can learn from our case and hopefully it doesn’t happen to another family.”

Cyclone Debbie inflicted widespread damage on Airlie Beach. Pic: Alix Sweeney

Meanwhile, Mr Sutton’s home near Airlie Beach in northern Queensland had part of its roof blown off in Cyclone Debbie. But more than a year and a half after the tropical storm blew through the area, Mr Sutton’s roof has only just been demolished and repairs are yet to begin.

“It’s an absolute shambles,” Mr Sutton told the royal commission. “You take out insurance hoping that it never happens. But if it does you want them to have your back. It just didn’t happen,” he said.

The royal commission heard Mr Sutton’s house was only given an initial visit by a builder when an engineer and possibly a consultant were also required to assess the damage to his property.

It took nearly a month for Youi to set up a tarpaulin to cover the damaged roof.

“When it was first installed it was sufficient. It didn’t last very long. Once we had wind the tarpaulin was torn to shreds and water was pouring back into the building,” Mr Sutton said.

“Every time we had rain it would pour through and create more damage to the building. The minute you walked into the house you could smell the mould. You could see it.”

Youi’s initial quote was “insufficient” and the builder failed to inspect the inside of the roof to make sure the structure of the building was safe, Mr Sutton said.

Meanwhile, as the house was unable to be lived in, Mr Sutton was forced to find his own accommodation and pay rent and bond. It took chasing before Youi caught up on reimbursing Mr Sutton and his wife for the rent.

“It started to string out and string out. They were months behind,” he said.

Jason Storey, the chief operating officer for Youi’s claims division, said the evidence of Ms Murphy and Mr Sutton did not meet the requirements of the industry’s code of conduct in regards to responding to catastrophes. “We certainly have a lot of work to do there,” he said.

Mr Storey will continue to be questioned at the commission.