Building damage claims in Australia: working with your own loss assessor

Sudden damage versus gradual deterioration

Most Australian home and commercial property policies cover sudden and accidental damage or listed events such as storm, impact, escape of liquid and fire. They exclude, in various forms, wear and tear, rust, rot, gradual leaks, faulty workmanship and lack of maintenance. Many building disputes therefore start with one question: was the damage caused by an insured event, or was it already developing?

A policyholder's assessor gathers evidence to answer that question objectively, through inspection, photographs, moisture mapping, maintenance records and, where needed, a structural engineer's or plumber's report. The aim is to show which damage is covered and why.

How the insurer's process usually runs

After you lodge the claim, the insurer typically sends a builder or assessor from its panel, and for larger matters a loss adjuster. They prepare a scope of works and a cost estimate. The insurer then decides whether to accept the claim and whether to repair through its own builder or offer a cash settlement.

Under the General Insurance Code of Practice, retail customers should receive regular updates and a decision within defined timeframes, with reasons in writing if the claim is denied or reduced. Ask for copies of the reports used to make the decision.

• Lodge the claim and make the property safe
• Inspection by the insurer's builder, assessor or adjuster
• Scope of works and estimate prepared
• Decision on liability, then repair or cash settlement
• Repairs, final inspection and claim closure

Where your own expert adds value

An independent assessor reviews the insurer's scope line by line. Common gaps include hidden damage behind linings, matching materials so repaired areas do not look patched, compliance upgrades required by current building standards, removal of hazardous materials, and professional fees for engineers or certifiers. The assessor prepares an alternative scope, supported by independent builder quotes, and negotiates the difference.

Assessors also watch for the way the insurer's estimate is priced. Panel builders often work at negotiated rates that may not be available to you if you take a cash settlement, and catastrophe events can push local prices up quickly. A scope may be complete in its list of items yet still undervalued in its rates. Comparing the estimate with two or three local quotes is the simplest way to test it.

Cash settlement or insurer-managed repair

Insurers often prefer to repair through their own builders, who work at negotiated rates. If you are offered a cash settlement instead, check that the amount reflects what you would actually pay a builder in your area, not the insurer's discounted rates. Accepting cash usually transfers the risk of cost overruns and later defects to you.

If the insurer manages repairs, the work should be guaranteed. Keep records of any defects, and raise them in writing promptly. An assessor can inspect completed work and document defects before the claim is closed.

Before deciding, ask the insurer to confirm in writing how a cash settlement is calculated, whether it includes GST, builder margins and professional fees, and what happens if further damage is discovered after you accept it. Some insurers allow a claim to be revisited for hidden damage, others treat a cash settlement as final.

Building the evidence file

Strong evidence shortens disputes. Photograph damage from wide and close angles, with dates, before any clean-up. Keep damaged materials if safe, and collect older photos, building inspection reports, maintenance invoices and plans that show the condition of the building before the event.

• Weather data or incident reports for storms, impacts and leaks
• Plumber, roofer or electrician reports on the cause
• Independent builder quotes using local market rates
• Engineer reports for cracking, subsidence or structural concerns
• A written log of every contact with the insurer

Strata buildings and owners corporations

For apartments and townhouses, the building is usually insured under the strata policy held by the owners corporation or body corporate, not by individual owners. Damage to common property and often to the structure of individual lots is claimed under that policy. Decisions about appointing an assessor normally need to go through the strata committee, so lot owners should raise concerns there early.

Escalating a disagreement

Put your objection in writing through the insurer's internal dispute resolution process, attaching your assessor's report and quotes. The insurer must respond within set timeframes. If the matter is not resolved, you can complain to the Australian Financial Complaints Authority, which is free for consumers and eligible small businesses and can review technical evidence from both sides.

For very large commercial claims beyond AFCA's limits, options include further negotiation, mediation or court proceedings, ideally with legal advice.

Keep the tone factual. A short, numbered response that addresses each point in the insurer's decision, backed by evidence, is more effective than a long complaint. It also gives AFCA a clear picture if the dispute goes further.

Building damage claims are won on detail: cause, scope and real repair costs. An independent assessor can close the gaps that the insurer's initial estimate may leave open.