Hollard Insurance had initially declined the claim following a fire in October 2021, pointing to non-disclosure issues. However, upon the homeowner's appeal to the Australian Financial Complaints Authority (AFCA), the insurer revised its stance.

Hollard agreed to settle the claim with a payment of $415,937, allocating $300,437 for the building damage and $12,875 for contents, in addition to payments for temporary housing, non-financial loss compensation, professional fees, and accrued interest.

Despite this, the property owner contended the settlement was not fair, arguing his home and belongings were underinsured. Hollard defended the settlement, noting it was still higher than the policy’s insured amounts of $240,350 for the home and $10,300 for the contents.

The homeowner had purchased the policy through his bank, which acted as an authorised representative of the insurer. He claimed the bank's employee had provided financial advice without adequately understanding his financial situation or reviewing his personal circumstances. Additionally, he mentioned not receiving the policy documents.

In its ruling, the AFCA stated that based on the information provided, there was no substantial evidence that the bank's representative offered personalized advice.

“Though the complainant suggested that the representative promised to handle all the coverage details, the panel did not find sufficient proof that personal advice was given,” noted the AFCA.

The authority further emphasized that during an interview with the insurer, the complainant had confirmed receiving and reviewing the policy's product disclosure statement and insurance certificate, thus acknowledging the insured amounts and the underinsurance to reduce premiums.

“I didn’t foresee this type of incident happening, so I underinsured some things to pay a lower premium,” admitted the complainant.

With this acknowledgment, the AFCA supported the insurer's position to settle based on the confessed amount.

Furthermore, the AFCA dismissed the complainant’s request for additional legal fees amounting to $27,500, over and above the $5,000 already provided by Hollard. The complainant claimed that his cognitive impairment made self-representation unfeasible.

But the authority concluded that there was inadequate evidence to substantiate the extent of his cognitive impairment and asserted that Hollard had justifiable reasons to scrutinize the claim, leading to legal expenditures.