Ask an Expert: How does AFCA use expert reports in the context of insurance claim disputes?

In my experience, one of the most common and difficult aspects of decision-making at AFCA is reviewing expert reports to determine proximate cause; that is, whether a loss is covered or not. 

Our job as an as an independent dispute resolution body is to critically analyse the experts’ key findings, assumptions and evidence. 

The key component we look for is quality. Statements made by experts need to be supported. A report that simply provides an opinion is unlikely to be given much weight, particularly if there's a contradictory report providing a more detailed, reasoned or quantified analysis. 

Even though the issue might be very technical, a good expert report will drill down to the basics in a way that any layperson can understand.

We aim to be adaptable, as an approach that’s too rigid can lead to harsh and arbitrary outcomes.

Examples:

1. One expert identified a leak from the bottom of the shower, but the damage was to the wall adjacent to the bedroom. I could not understand how water at the bottom of the shower could cause damage to the adjacent wall. 
2. One complainant’s expert had observed the property over several years and determined that it had an extensive history of leaks. This had not been factored in by the insurer’s expert, which undermined their case.
3. I've seen hydrology reports that fail to identify the exact timing or source of an initial inundation yet dismiss the possibility that it could have been non-flood water. That can be fatal to an insurer who must prove that the damage was caused by flood.

Other elements to consider:

• Independence: if it's clear that the report is not independent, the weight given to it is reduced, especially if there’s a conflict of interest at play.
• Qualifications: experience is very important and in some cases one expert might be better placed to provide a report than another.
• Physical inspection is usually better than assessing photos via “desktop review”.
• Time and date of assessment: obviously, an assessment contemporaneous to the event is more useful.
• The scope of instructions: a properly briefed expert is more likely to provide evidence of proximate cause. For example, a fundamental gap exists if an expert considers damage to the roof, but not how water entered the house.

Attributable to Chris Liamos, Senior Ombudsman, General Insurance, AFCA.

Have a question? Ask an Expert here