Qld cyclone victims with cover hit by insurance scandal
CYCLONE victims have been short-changed and recommended cheap band-aid fixes in a growing insurance scandal that puts potentially thousands of disaster assessments under a cloud.
At least three of the state's top insurance companies have been using a building firm that was unlicensed in Queensland and employed unlicensed building consultants. The firm has already been censured, and at least 10 other cases involving it are believed to be under investigation.
Many of the claims, which could stretch back five years and involve insurance giants QBE, RACQ and Youi, recommended cheaper repair jobs that favoured the companies over home owners.
Several regulators, including Queensland's building commission, are investigating the troubling allegations.
The Queensland Building and Construction Commission censured US-based multinational Crawford and Company in December for operating without a licence after Cyclone Debbie, in what experts have warned is just the tip of the iceberg.
In one case, where a 40-metre tree partially destroyed a home and knocked it off its foundations, the building report recommended a structurally unsound property be repaired rather than rebuilt.
In another, a home owner who was quoted just $120,000 on the basis of a report produced by a gasfitter discovered the work would cost more than $220,000 when it was assessed by an independent licensed builder.
The period in which Crawford operated without a licence included three of Australia's most expensive cyclone disasters - Debbie ($1.565 billion), Oswald ($1.13 billion) and Marcia ($544 million).
QBE, RACQ, Youi, Crawford and the Insurance Council of Australia insist no regulations were breached because no actual building work was carried out to produce the reports, known as a scope of works.
The scope of works lists the repairs that an insurer will cover.
A QBCC spokesman confirmed that the regulator considered the scope of work as part of the building process.
"The QBCC would expect that a scope of work being undertaken on behalf of an insurance company would be performed by an appropriately licensed person, as a scope of work is regarded as building work," the spokesman said.
"However, a report being undertaken on behalf of an insurance company could qualify for an exemption from the requirement to be licensed, though care would be needed to ensure that this report was not then used as the basis for a scope of work."
In the cases under investigation, Crawford subcontracted the production of the scope of works to a wholly owned subsidiary, CRD Building Consultants and Engineers.
CRD national manager Mark Williamson said the company was attempting to clarify QBCC's position.
"We've received independent legal opinion that we are not required to hold a QBCC licence because the work that we do is not deemed to be building work under the QBCC regulation 38," he said.
"It says if you are doing inspections, investigations or reports in regard to an insurance claim it is not deemed building work and we see that as what we do as work."
Insurance council spokesman Campbell Fuller said it was a "matter for the QBCC" to resolve.
"In general, the industry relies upon appropriately experienced professionals to provide advice on the repair process before formal building work starts."
Claims advocate David Keane, the owner of Solve My Claim, who has referred about a dozen allegations of reports prepared by CRD to the QBCC, said he had received about 10 more complaints involving the company.
"Building scopes have been the biggest dispute in Cyclone Debbie and that is from insurance companies having much lower scopes than local builders and other qualified builders," he said.
"Any scope that has been provided by CRD at a time when the company or a consultant was not properly licensed will be sent to QBCC and I encourage anyone with previous claims through the company to do likewise".
QBE and Youi both conducted internal investigations into the use of the reports but neither company found evidence of a breach.
A QBE spokeswoman said the company believed there was "no compliance issue".
"QBE engages loss adjusters to carry out loss adjusting work, and no licence is required for this work," she said.
A Youi spokeswoman said they could "confidently confirm that CRD are fully qualified and experienced to carry out the work they undertook in this instance".
An RACQ spokeswoman said CRD had produced scopes of work but did not complete any building work.
Soon after allegations were raised with the insurance companies, Crawford and CRD applied for and received QBCC building licences. Mr Williamson said this was not an admission of fault but to "close it off as an issue".
Engineer revealed as a gasfitter
WHEN a man arrived to assess the damage to Courtney Cranmer's house just after Cyclone Debbie, she never considered asking for his credentials.
Her insurer, Youi, said they were sending an engineer. He was a gasfitter.
"Why should I have to check his identification?" Ms Cranmer said.
"I probably should have but it's a bit offensive to say 'where's your qualification?'. You assume the insurance company is doing the right thing and using credible people."
Nearly a year later, Ms Cranmer, a property valuer, and her husband are still locked in tense negotiations with Youi.
The report prepared by the gasfitter is at the centre of the standoff.
Youi has said it was only an assessment and the report was sent to licensed builders to tender and undertake the building work required.
But of the three tenders that came back for the Cranmer job, Youi chose one that was tens of thousands of dollars less than the others.
Ms Cranmer said that builder spent about five minutes at her home and copied the scope of works prepared for the insurer.
The builder originally quoted $120,000. She complained and he changed it to $160,000 overnight without reinspecting the house. Ms Cranmer hired an independent builder who said the work would be at least $220,000.
She said despite Youi claiming the scope of works was not a final document, they had based all their decisions about repairs on that document.
During the standoff, the couple has paid $30,000 and borrowed $80,000 to repair the roof before next rainy season.
A Youi spokeswoman said the company was trying to understand the customer's concerns so they could reach a resolution as soon as possible.