Policy provided no cover for animal or moisture damage to property

Home & contents insurance,
In 2020, Seol bought investment properties with money borrowed from the bank. She also insured the properties with the bank. About a year later, she discovered damage to one of the properties caused by the tenant's animals. There was also moisture damage that appeared to have been going on for some time. Seol made a claim, but it was rejected.
November 2022

The insurer said her policy did not cover either gradual damage or animal damage. Seol complained to the bank that the insurance it put in place was did not meet her needs, which she had made known to the bank. She also complained that bank errors during the lending application process delayed settlement and left her with no option but to accept the insurance offered by the bank just one day before settlement. The bank did not accept responsibility for Seol not being insured for her losses, so she asked us to investigate.

Our investigation

When selling insurance, a bank has an obligation to exercise care, diligence and skill. Generally, a bank adviser must ensure the policy being offered for sale suits the customer’s needs. We found Seol told the bank that she needed "rental cover" and that the bank should have told her about an optional benefit for landlords but failed to do so. However, this optional benefit still would not have provided cover for either the moisture or animal damage. We could find nothing to suggest she was pressured into taking the insurance with the bank, noting that Seol was aware of the need for insurance in advance of settlement and had obtained a quote from another insurer. We also noted she had the opportunity to review her insurance any time after settlement.


We did not uphold her complaint.

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