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Suncorp offered $30k for damage worth $744,000

Suncorp customer Bernadette Heald speaks to the media outside the royal commission.

Suncorp customer Bernadette Heald speaks to the media outside the royal commission. Photo: AAP

Suncorp offered a Hunter Valley family $30,000 for repairs of a house that eventually needed a total rebuild valued at $744,000, the financial services royal commission has heard.

Bernadette Heald told the commission that the house had suffered significant damage in violent rain storms that hit the Hunter region in April 2015, dropping 440 millimetres of rain in a weekend.

The damage included tearing off balcony railings and garage doors, breaking windows and damage to plaster board linings.

The Healds lodged a claim with Suncorp the following day but further damage became apparent soon after.

A building inspector sent by Suncorp eventually arrived in May and told the family he had concerns of structural damage and would need to send an engineer to inspect.

Further inspections and minor works by builders left the Healds disappointed as they seemed to ignore some issues and not answer their questions. They became frightened as further rain did damage and cracking sounds could be heard in the house as bricks were breaking.

Ms Heald’s daughter, who suffers from anxiety, started waking up in the night fearing the house would fall down.

“It’s very hard as a parent to actually tell her that it’s safe. And you don’t know yourself,” Ms Heald said.

When the engineer did arrive his report was “very confusing; there was no real details to say why our house was broken,” she said.

In June Mr Heald complained to Suncorp but got no satisfaction, with the insurer not dealing with the issue.

When he eventually convinced them to send a second engineer he told them that the house “was slowly disintegrating,” Ms Heald said.

As a result of the second engineer’s report Suncorp issued them with a quote of $30,000 to fix the problems in October, six months after the storm.

Once they received the quote, which Ms Heald thought at the time “sounds crazy”, Suncorp tried to negotiate a cash settlement. By the end of 2015 they became so disillusioned they lodged a claim with the Financial Ombudsman Service.

Suncorp then tried to settle the dispute with offers of $1000, followed by $3000. They accepted the later offer for the delay in dealing with their claims handling but kept the complaint with FOS going over the $30,000 settlement offer.

A further engineer’s report, which Suncorp eventually agreed to fund, found the house was sinking at both ends. Despite the Healds’ concerns, Suncorp maintained the house was safe to live in.

Engineers then said the house needed to be knocked down and replaced. Suncorp offered $635,000 but FOS ordered $744,000, with which Ms Heald said she was happy. It was a far cry from the $30,000, Suncorp had initially offered.

Three-and-a-half years later the Healds are still living in temporary accommodation waiting for their new house to be completed.

Suncorp CEO Gary Dransfield said Suncorp had breached the insurance code in its dealings with the Healds.

He also said, “We failed the Heald family and for that I’m sincerely sorry to the Healds for the impact on them”.

Earlier in the day the commission heard that Suncorp had paid fines to ASIC of $42,300 over misleading advertising when a penalty as high as $7.2 million could have been levied.

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