The Value of Independent Engineering Assessments in Insurance Claims

Background

In early 2025, a severe tropical cyclone, Alfred, impacted several residential and commercial properties along the Queensland coast. The high winds and torrential rainfall caused widespread structural damage, including roof uplifts, water ingress, and façade deterioration, outdoor structure. Following the event, numerous property owners lodged insurance claims for storm-related damage.

Among these was a coastal apartment complex built in 2001, comprising 24 residential units. The owners’ body corporate (Strata) submitted an insurance claim covering damage caused by driven rain to internal units’ areas and twisting of roof structure, asserting that the damages were directly caused by the cyclone event.

The Challenge

When the insurer’s initial inspection team attended the property, they noted multiple defects. However, not all observed issues were necessarily attributable to the cyclone. Some exhibited signs of long-term deterioration and poor maintenance, such as corroded fixings, blocked drainage, and roof sealant degradation; issues typically excluded under most insurance policies as they are maintenance related.

At the same time, the owners believed the insurer’s assessor underestimated the extent of legitimate storm damage, particularly to internal ceilings and roof trusses that were not visible during the initial inspection.

This discrepancy between claimed damage and policy coverage created tension and delays in claim resolution, underscoring the need for a qualified and independent engineering assessment.

Independent Engineering Involvement

To resolve the dispute, both parties agreed to engage Rainbow Engineering as an independent structural engineer with experience in post-disaster building assessments. The engineer’s scope included:

1. Detailed site inspection of the roof, structural framing, and stormwater systems.
2. Differentiation between storm-induced damage and pre-existing maintenance defects.
3. Assessment of compliance with the National Construction Code, which was valid at the time of Build, and relevant Australian Standards.
4. Provision of an objective technical report identifying the cause, extent, and severity of each defect with photographic evidence and analysis.

Findings

The engineering report concluded that:

• Roof sheet twisting and displacements and water ingress in certain areas were consistent with wind uplift and pressure differentials caused by cyclonic winds (in accordance with AS/NZS 1170.2 wind actions).
• Several other issues, such as corroded gutter brackets, deteriorated sealants, and blocked drainage outlets, were found to be maintenance-related and predated the storm event.
• Hidden damage to ceiling framing members, which were initially overlooked, was directly attributed to prolonged water ingress following the cyclone, warranting inclusion in the insurance claim.

Outcome

Based on the independent engineering assessment:

• AFCA has ruled to the insurer to accept the storm-related structural damages as claimable under the policy.
• The property owners agreed that maintenance-related issues were outside the policy scope and scheduled separate remedial works.
• The claim was settled fairly and efficiently, avoiding protracted disputes or litigation.
• The independent engineer’s report became a transparent and  defensible document, supporting both parties’ positions.

Key Lessons

1. Objectivity is critical. Independent engineering assessments remove bias, providing technical clarity and accountability.
2. Pre-existing vs. event-related damage differentiation is essential in cyclone and storm claims, ensuring maintenance issues are not inadvertently included.
3. Engineering evidence accelerates claim resolution, saving time and costs for both insurers and clients.
4. Compliance alignment with NCC and Australian Standards strengthens the defensibility of the findings.

Conclusion

Independent engineering assessments are vital in post-cyclone or storm insurance claims.
They provide an impartial, evidence-based foundation for determining the true extent of storm related damage versus pre-existing maintenance issues. This ensures that clients are rightfully compensated, and insurers uphold policy integrity fostering trust, transparency, and technical credibility in the claims process.