The issue dates back to 2018 when the owners lodged a claim after multiple hydrants were deliberately opened, causing water damage to the lifts. Although the lift manufacturer and maintenance consultants recommended replacing the hoist ropes, Chubb’s assessor did not initially approve this part of the claim.
After a scope of work was agreed upon, the cables were placed on a "watchlist" due to anticipated further deterioration caused by water exposure. In 2019, consultants reiterated concerns of moisture-related damage, urging restoration to the lifts’ original state. Consequently, the replacement work for the hoist ropes was completed in 2020, with the owners claiming the expenses under the initial policy.
Chubb contested the claim, stating that "direct physical damage" from a "sudden and accidental" cause is required for policy application. They argued the cable damage resulted from insufficient lubrication and prolonged use, not the earlier vandalism.
According to Chubb, their appointed consultant found no concrete evidence of water causing damage to the main hoist ropes. However, AFCA’s ruling challenged this stance, citing inconsistencies in the maintenance records and earlier assessments acknowledging water exposure.
The AFCA panel expressed skepticism about Chubb’s theory of overuse leading to the cable damage, finding the insurer’s expert report unsubstantiated by technical or scientific testing. Instead, the ruling recognized the significant water event of 2018 as the probable cause, aligning with the insurable event criteria of the policy.
An AFCA ombudsman articulated doubt over Chubb's exclusions explaining the damage, remarking on the absence of convincing counter-evidence. As the conditions of policy exclusions were not sufficiently proven, AFCA concluded that the water event was the leading cause of damage, fulfilling the policy’s terms.
