Your cover has been blown
Cyclone victims have been shortchanged 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.
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.
News Corp can reveal 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 company has already been censured, with at least 10 other cases from the firm 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 which favoured the companies over homeowners.
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 40m tree partially destroyed a home and knocked it off its foundations, the building report recommends a structurally unsound property be repaired rather than rebuilt.
In another, a homeowner was initially quoted just $120,000 on the basis of a report produced by a gasfitter, but discovered the work would cost more than $220,000 when it was assessed by an independent licensed builder.
The period Crawfords operated without a licence includes three of Australia’s most expensive cyclone disasters: Debbie ($1.565 billion), Oswald ($1.13 billion) and Marcia ($544 million).
QBE, RACQ, Youi, Crawfords 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 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, Crawfords 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 regards to an insurance claim it is not deemed building work and we see that as what we do as work.”