The affected homeowners were initially uncertain about what triggered the malfunction, which rendered their solar system inoperable. They speculated that a storm, coinciding with the onset of the problem, was the cause. They enlisted a solar expert's help, who discovered that a main fuse had blown, and the inverters were rendered ineffective due to component burnout.
The expert attributed the damage to an "external weather event," and repair estimates were pegged at $80,436. Conversely, an expert for the insurer, IAG, challenged this assessment by stating that no evidence of a storm impacting the property was found. IAG also dismissed the possibilities of a power surge or electrical distribution influence, asserting the damages likely arose from a generator failure.
Consequently, IAG refused the claim based on their policy, which excludes damages to electronic equipment due to electrical or mechanical malfunctions. Nonetheless, the claimants contended that their solar system shouldn't fall under the 'electronic equipment' category outlined in the policy.
In its assessment, the Australian Financial Complaints Authority (AFCA) recognized the damages as "accidental damage." The authority agreed that while the system could be categorized as both electrical and electronic, the insurance policy included a clause that didn't cover electronic failures "unless the breakdown results in loss or damage to insured property."
AFCA criticized the insurer's stance that portrayed the solar system as a single unit without further collateral damage. The breakdown, starting with the fuse failure, didn't imply all involved systems were inherently linked as one unit. According to AFCA, the generator's issue led to ensuing property damage, leaving the entire solar inverter system and panels inoperative.
Although the ombudsman acknowledged the policy exclusion regarding the generator's main control fuse, they concluded the insurer must cover the remaining damages as they were resultant, and not only limited to the generator.
AFCA encouraged both parties to collaborate on resolving the claim, noting that the claimant's repair quote lacked itemization. IAG was advised to carry out its assessment and assure repairs with a lifetime guarantee. If the homeowners have already undertaken the repairs, the insurer is expected to reimburse their expenses.
