Elanora family’s home left gutted after damage from Cyclone Alfred sparks insurance battle
What started as water damage in an Elanora family’s bathroom and kitchen after Cyclone Alfred led to their entire home needing to be gutted.
What started as water damage in a bathroom and kitchen led to an entire Gold Coast family’s home needing to be gutted and an eight month battle with their insurer.
Father-of-three Andrew Derham has been left feeling helpless and angry, saying Budget Direct mishandled his claim and the spread of mould and water damage in his Elanora home after Cyclone Alfred earlier this year could have been prevented.
He now fears his family may have nowhere to live in December as his insurance allowance for temporary accommodation runs dry.
“If the initial repair work had been done properly, our house wouldn’t have needed to be gutted,” he said.
“We were told many times (our insurer) would not leave our family homeless but that is exactly what they are doing.”
Budget Direct paid out Mr Derham’s policy earlier this month but his home is still unliveable as independent contractors work to rebuild it.
During the wild weather of Cyclone Alfred, a large tree, which was not on Mr Derham’s property, fell onto his home on March 7.
This smashed part of the roof and led to water damage in the bathroom and kitchen.
Mr Derham made a claim to his insurer, Budget Direct (Auto and General Services Pty Ltd), on March 11 but it wasn’t until days later on March 22 when contractors first attended his property.
His home insurance policy covers $750,000 plus 10 per cent for debris and temporary works.
Contractors placed drying equipment in the kitchen and bathroom, and areas that already had grown mould were treated and covered with plastic.
They attended the property a second time on March 25 and more water damage was detected with further drying equipment placed in the hallway, master bedroom and main living area.
But the damage, now valued at more than $500,000, had continued to spread; the kitchen and bathroom ceilings had collapsed, the roof was structurally damaged and mould left the wall warped.
“(The contractors) were putting band-aid fixes over it, hoping it would fix it,” Mr Derham said.
The family were forced to move out of their home but Mr Derham struggled to find appropriate temporary accommodation for himself, his wife, three children, aged 16, 15 and seven, and two dogs that was within his policy allowance.
His insurance included $75,000 for temporary accommodation.
Mr Derham claims his provider were only advising him about properties that were too small for his family, such as two bedroom apartments, but they eventually found a home in Palm Beach in April.
But in October, Mr Derham said things went from bad to worse when his insurer warned him they would stop making payments for the rental as their temporary accommodation funds dry up.
“Our house (in Elanora) is still uninhabitable and gutted but we face being forced out of our rental with nowhere to go,” he said.
The family’s furniture and belongings have been left covered in mould after the insurer advised them to leave these items inside the house after they moved out, Mr Derham said.
Their policy did not include contents insurance and they were not eligible for storage costs.
Mr Derham has since lodged a claim with the Australian Financial Complaints Authority (AFCA) due to the insurer’s “miscommunication, delays and inadequate repairs”.
In response to the claim, it stated: “Having carefully reviewed the exchanged information, I am satisfied that the insurer did contribute to the delays experienced and on occasions communicated poorly.
“Even though the complainants’ service expectations appear at times to have been unrealistic, I accept that the insurer’s failings have caused each of them notable stress and inconvenience.
“Further, that the complainants were on notice from the outset of the extent of (temporary accommodation) cover available and that the policy does not include cover for contents.
“The insurer says payments it has made and offered outside the policy terms sufficiently compensates the complainants.
“It would be unfair to require the insurer to pay for temporary accommodation outside the policy when the temporary accommodation cover would likely have run out before repair completion in any event.
“The policy does not cover contents, and the insurer is not responsible for the contents damage so it would be unfair to require the insurer to pay for that damage.
“However, it is fair that it pays more compensation.”
AFCA ordered the insurer to pay $4000 in non-financial loss compensation but Mr Derham said this “doesn’t even come close” to addressing the issues.
He claims his insurer also deducted the cost of failed make safe works out of his $750,000 cover, despite the additional 10 per cent in his policy to cover these expenses.
A spokeswoman for Budget Direct said it was “committed to the highest standards of customer service when handling policy claims”.
“We recognise Cyclone Alfred was a distressing weather event that caused significant damage to many properties and we have worked closely with Mr Derham to address his claim, which has been paid out,” she said.
“All claims that require make safe work are conducted by experienced contractors as quickly and effectively as possible to temporarily protect infrastructure and property, in accordance with safety standards, and in line with budgets and parameters selected by clients in their policies.
“We respect policy holders’ rights to review settlements via the independent ombudsman AFCA, and we abide by their determinations.
“We welcomed the determination in this matter and look forward to completing the proposed settlement as soon as the customer has accepted AFCA’s determination.”
Mr Derham said the situation had been “awful” and “incredibly stressful” for his family.
“There are no words because you feel so helpless,” he said.
“It’s been shocking.
“We’ve had to move a couple of times and (the kids) have been really good about it, they understand, but it’s an upheaval of your whole life.”
Mr Derham plans to continue trying to seek further compensation for the ordeal.
More Coverage
Originally published as Elanora family’s home left gutted after damage from Cyclone Alfred sparks insurance battle
