Suncorp insurance offered just $30,000 for a home's flood damage that would eventually cost $744,000

Daniel Munoz/Getty ImagesHunter Valley storm damage 2015.

Suncorp offered flood victims just $30,000 to settle an insurance claim for damage to a home which would eventually cost $744,000, the financial services royal commission was told on Thursday.

The commission heard that Suncorp had also refused to pay for temporary accommodation to Bernadette Heald and family whose house in the Hunter Valley, NSW, was hit by a storm in April 2015 which caused flooding.

“They (Suncorp) were supposed to help us, and we got nothing,” she told the commission hearing. She is married and has two children, one who has had heart transplant and another with mental health issues.

After an engineer’s report, Sunscorp offered $30,000 to settle the insurance claim, but the family pushed for another report that said it should be knocked down and rebuilt. Suncorp did not accept that opinion.

The insurer only agreed to put the family in temporary accommodation in January, 2017.

“The fact that we had to live in a house for over two-and-a-half years that was broken, that they knew about, and we had two special needs kids which they knew about right from the word go, was atrocious,” Heald told the commission.

She said her daughter would wake in the middle of the night terrified that the house was going to fall on her head.

Suncorp subsequently increased its offer to $635,000, but the Heald family rejected this and took their case to the Financial Ombudsman Service which in January this year determined the payout should be $744,000.

The re-build of the house is due to be completed early next year.

Counsel assisting the commission Mark Costello asked Suncorp head of Insurance Gary Dransfield how his company got it so wrong?

Dransfield said: “May I just say one thing: seeing the person affected by it puts a human face on what happened, how we failed the Heald family and for that I’m sincerely sorry.”

At the same time, Suncorp was being grilled in the royal commission, the company’s chair, Ziggy Switkowski, was today telling shareholders that commission has placed the industry’s poor processes and behaviours under a spotlight.

“While this is not always comfortable, we welcome any measures that promise to deliver improved outcomes for customers,” he told the AGM.

“While I am sure every financial institution is taking lessons from the hearings, we cannot yet know and do not seek to pre-empt the extent of regulatory changes that will result from the Commissioner’s findings and recommendations.

“What we do know, is that the current regulatory environment continues to sharpen the focus on the importance of culture and behaviours in driving positive outcomes for customers.

“Our focus is on continually improving in order to meet customer and community expectations. We will continue to build a culture that appropriately balances the needs of all of our stakeholders.”

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