The Australian Securities & Investments Commission has commenced Federal Court proceedings against Hollard Insurance, alleging serious failures in handling a home building and contents claim and a breach of the duty of utmost good faith under the Insurance Contracts Act. The case centres on a claim lodged on 31 October 2021 after a major storm damaged a couple’s roof in regional Victoria. ASIC alleges Hollard initially accepted the claim but then repeatedly delayed decisions about repairs, took over nine months to initiate an inspection by a structural engineer, and delayed providing temporary accommodation, before rejecting the claim in late April 2023 after the couple had waited 18 months. The rejection is alleged to have relied on a non-expert opinion over prior expert reports, and ASIC claims that delays, poor communication and ignoring expert advice exposed the policyholders to unnecessary and prolonged harm, leaving the home uninhabitable and requiring demolition and rebuild. ASIC is seeking declarations and a civil penalty in relation to section 13 of the Insurance Contracts Act. ASIC linked the proceeding to its concerns about a rise in general insurance complaints reported to the Australian Financial Complaints Authority since the 2022 floods, particularly complaints involving claim delays, and noted it is monitoring general insurers’ responses to its earlier home insurance claims review and plans to publish related findings shortly.

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