Ombudsman Orders Higher Compensation From Insurer Over Mould Dispute

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The homeowner, dissatisfied with earlier repair efforts concluded in May 2023, cited an expert analysis revealing ongoing mould contamination. The analysis detailed "moisture migration" from damp materials on the ground floor contributing to mould growth on the upper levels of the home. A mycologist’s inspection in August 2023 uncovered significant fungal spore concentrations throughout the property, including in the insulation and air-conditioning system.

Subsequent investigations indicated elevated spore levels within key areas such as a bedroom and bathroom. The mycologist conclusively stated that the property was not adequately remediated for mould.

Hollard refuted these findings, asserting repair work was satisfactory and contested the reliability of the homeowner's assessments, which were conducted six to ten weeks after Hollard’s expert, WEC, had reportedly verified the mould issues as resolved. Hollard suggested that any ongoing mould presence could be attributed to external factors, such as the homeowner’s pets or workers.

Conversely, the AFCA panel criticised Hollard’s WEC findings for their lack of specificity, primarily relying on generalized airborne mould testing. In contrast, the complainant's experts provided more comprehensive evaluations evidencing persistent mould issues.

The AFCA noted a contradiction in Hollard’s stance, linking the return of mould to non-claimable factors, as this was not in alignment with its own investigations which attempted to undermine the homeowner's findings of mould.

The authority concluded that Hollard had inadequately addressed the mould issue, likely exacerbated by insufficient containment and delays, allowing its spread to the upstairs area of the property.

In light of these findings, AFCA recommended a fair resolution involving a cash settlement to encompass a renewed scope of works with a 15% contingency increase. Moreover, Hollard is required to fund alternative accommodation while the property remains uninhabitable, compensate for any damage from its repair work, and cover the homeowner’s expert costs.

Additionally, Hollard has been mandated to pay a total of $5,400 in damages—$2,500 for the unresolved mould issue and $2,900 for failing to adhere to an earlier AFCA dispute outcome.

Published:Monday, 10th Mar 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

ASIC Service Review Keeps Income Protection Basics in Focus

04 Nov 2026: Paige Estritori

ASIC’s 2026-27 life insurance priorities have put a practical issue back in front of income protection customers: the basic administration behind a policy can matter just as much as the headline level of cover. In its latest sector letter to life insurer boards and executives, the regulator says it is continuing a review into service issues in life insurance, with a report expected in the third quarter of 2026-27. - read more

Income Protection Complaints Remain a Key Life Insurance Pressure Point

28 Oct 2026: Paige Estritori

The Australian Financial Complaints Authority’s latest annual review has put income protection insurance back in focus, with the product again attracting the highest number of life insurance complaints in 2025-26. The figures are a useful reminder that the real value of cover is tested not at purchase, but when illness or injury interrupts a person’s capacity to earn. - read more

What Genetic Testing Reform Could Mean for Income Protection

16 Sep 2026: Paige Estritori

Federal moves to restrict the use of genetic test results in life insurance underwriting have important implications for Australians who are thinking about income protection cover. The reform is designed to reduce the fear that taking a medically useful genetic test could later make it harder, more expensive or impossible to obtain personal insurance. - read more

Why Premium Differences Matter When Choosing Income Protection

09 Sep 2026: Paige Estritori

Recent income protection cost commentary has put a practical issue back in front of Australian workers: two policies that appear similar at first glance can carry very different long-term costs. For people relying on their income to meet mortgage repayments, rent, school fees, business expenses or family commitments, the premium is important, but it should not be viewed in isolation. - read more

ASIC Claims Scrutiny Highlights What Income Protection Customers Should Check

02 Sep 2026: Paige Estritori

Recent regulatory attention on life insurance claims handling has again highlighted a practical issue for Australians who rely on income protection insurance: the value of cover is tested most clearly when a person is too unwell or injured to keep earning. While the industry has been working to improve service standards, the latest scrutiny reinforces that delays, unclear requests for information and poor communication can make an already stressful period harder for claimants. - read more

Latest APRA Figures Keep Income Protection Under the Spotlight

26 Aug 2026: Paige Estritori

APRA’s latest life insurance performance data has again highlighted why income protection remains one of the most closely watched parts of the Australian insurance market. While the broader life insurance sector has continued to show signs of improved stability, disability income products remain sensitive to claims trends, pricing assumptions and the length of time people stay off work after illness or injury. - read more

Click for more Insurance News