Liability Insurance Australia :: News
SHARE

Share this news item!

AFCA Sides with Homeowners in Landmark Insurance Dispute Over Property Cracks

AFCA Sides with Homeowners in Landmark Insurance Dispute Over Property Cracks

AFCA Sides with Homeowners in Landmark Insurance Dispute Over Property Cracks?w=400

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 recently secured a favourable ruling against their insurer after a water leak led to significant structural damage.
After large cracks emerged on their property, Youi initially denied the insurance claim, attributing the damage to pre-existing issues like earth movement and tree root intrusion, both of which are exclusions in their policy.

Challenging Youi's stance, the homeowners took their dispute to the Australian Financial Complaints Authority (AFCA), which ultimately supported their case. The complainants argued that the damage, discovered shortly after the pipe leak in early 2023, was directly linked to the water escape.

An assessment by Youi's engineer had attributed the damage to ineffective drainage and was compounded by factors like inadequate footings and proximity to large trees. However, the homeowners countered this with their own engineer's assessment, indicating that the most severe damage occurred precisely where the leaked water had pooled, suggesting a strong correlation with the pipe burst rather than tree-induced movement.

AFCA emphasized the insurer's burden to establish that exclusions apply, noting Youi's lack of compelling evidence in their conclusions. The ombudsman's analysis favoured the complainants' expert findings, discounting the earth movement exclusion as unfounded given that the primary cause was the water leak.

The resolution mandates that Youi settle the claim, including coverage for temporary accommodations if necessary. Additionally, the insurer is required to compensate the homeowners with $1060 for professional fees alongside $4000 for non-financial losses, largely due to the distress caused by Youi's initial refusal to renew their policies. This decision was partly attributed to the insurer's premature policy termination despite the unresolved claim and ongoing case which involved credible external expert evaluations.

This development underscores the critical role of AFCA in ensuring that insurers adhere to fair practices and underscores the importance of homeowners closely documenting damage events to support their claims effectively.

The decision not only marks a significant outcome for consumer rights but also serves as a cautionary tale for insurers about the importance of comprehensive, evidence-based assessments before claim denial.

Published:Tuesday, 22nd Apr 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

HCF and Netball Australia Strengthen Commitment to Women's Health
HCF and Netball Australia Strengthen Commitment to Women's Health
19 Apr 2026: Paige Estritori
HCF, Australia's largest not-for-profit health fund, has announced the extension of its major partnership with Netball Australia and Super Netball, continuing as the sport's official health insurance partner through to the end of 2027. This renewal underscores HCF's dedication to improving the health and wellbeing of Australian women by supporting netball at all levels-from grassroots participation to elite competition. - read more
Gold-Level Health Insurance Premiums to Surge by Up to 25% in 2026
Gold-Level Health Insurance Premiums to Surge by Up to 25% in 2026
19 Apr 2026: Paige Estritori
Recent analysis by consumer advocacy group CHOICE has revealed that Australians holding gold-level health insurance policies may face premium increases of up to 25% starting in April 2026. This substantial hike significantly exceeds the average 4.41% increase approved by the government for private health insurance premiums. - read more
Instanda's AI Innovation: Transforming Commercial Underwriting
Instanda's AI Innovation: Transforming Commercial Underwriting
19 Apr 2026: Paige Estritori
Instanda, a leading provider of insurance technology solutions, has unveiled an artificial intelligence (AI) system designed to revolutionize commercial underwriting. This innovative system addresses the longstanding challenge of balancing speed and accuracy in the underwriting process, a critical aspect for consultants seeking efficient and reliable insurance coverage. - read more
ICA's AI Initiative: Strengthening Fraud Detection in Insurance
ICA's AI Initiative: Strengthening Fraud Detection in Insurance
19 Apr 2026: Paige Estritori
The Insurance Council of Australia (ICA) has announced a collaboration with global AI leaders EXL and Shift Technology to develop a national data analytics fraud detection and investigations platform. This initiative aims to empower Australian insurers to unite in the fight against organized fraud networks, enhancing the integrity and reliability of the insurance industry. - read more
Implications of Star Casino's Cladding Case for Construction Insurers
Implications of Star Casino's Cladding Case for Construction Insurers
19 Apr 2026: Paige Estritori
The recent legal proceedings involving The Star Casino in Sydney have brought to light critical considerations for the construction insurance sector. The casino's lawsuit against Buildcorp Group over the installation of aluminium composite panels (ACPs) has underscored the complexities surrounding liability and insurance coverage in construction projects. - read more
Click for more Insurance News


Business Insurance Articles

Insurance Essentials: Protecting Your Small Business with Public Liability Coverage
Insurance Essentials: Protecting Your Small Business with Public Liability Coverage
Running a small business in Australia comes with its own set of challenges and risks. One crucial aspect that should never be overlooked is insurance, particularly public liability insurance. The reason is simple: it offers essential protection against claims of property damage or personal injury caused by your business operations. - read more
The Cost of Safety: How Much Public Liability Insurance Does Your Australian Business Need?
The Cost of Safety: How Much Public Liability Insurance Does Your Australian Business Need?
As a business operating in Australia, understanding the ins and outs of public liability insurance is not just recommended, it's essential. This type of insurance serves as a safeguard, protecting your business against the financial repercussions of lawsuits and claims arising from third-party injuries or property damage due to your business operations. In a world where one unintended mishap can lead to costly legal battles, public liability insurance stands as your first line of defense. - read more
Public Liability Insurance for Events: What Organizers Need to Consider
Public Liability Insurance for Events: What Organizers Need to Consider
Public liability insurance is a type of coverage designed to protect businesses and individuals from the financial fallout associated with claims for injury or damage caused to third parties. It is particularly crucial for event organizers, who are responsible for ensuring the safety and security of attendees, vendors, and participants. - read more
5 Tips for Reducing Your Liability Insurance Premiums in Australia
5 Tips for Reducing Your Liability Insurance Premiums in Australia
Liability insurance is a crucial form of protection that offers coverage against claims resulting from injuries and damage to people or property. Within the bustling landscape of Australian businesses, possessing this form of insurance is key to financial security and continuity. It acts as a safety net, ensuring businesses can manage risks without bearing the full brunt of potentially costly legal claims. - read more
Understanding the Key Factors Influencing Your Liability Insurance Premiums
Understanding the Key Factors Influencing Your Liability Insurance Premiums
Liability insurance is a form of coverage that protects businesses against claims resulting from injuries and damage to people or property. It provides crucial peace of mind, ensuring that your business is shielded from potentially devastating financial losses due to lawsuits or claims against it. - read more


Start Here !

Start here!

Cover Amount:
Postcode:
All quotes are provided obligation-free by a participating broker from our national referral partner network. We respect your Privacy.

Knowledgebase
Whole Life Insurance:
A type of life insurance that provides coverage for the insured's entire lifetime, with a savings component that builds cash value.



Quick Links: | Liability Insurance Australia | Public Liability Insurance | Professional Indemnity Insurance | Business Liability Cover | Small Business Liability Insurance | Liability Insurance For Trades | Liability Insurance Quote | Corporate Liability Insurance | Liability Insurance For Professionals | Best Liability Insurance Australia
| HOME | RATES | CALCULATORS | NEWS | ARTICLES | ABOUT | CONTACT | PRIVACY | BROKERS | AFFILIATES | SITEMAP |
This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised Financial Services Representative of Unique Group Broker Services Pty Ltd, Australian Financial Services License 509434. Visit the ASIC website for additional licensing information.
powered by Financial Services Online | Copyright Clark Family Pty Ltd A.C.N. 010 281 008 - all rights reserved
IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.