NT Insurance Claim Denied - Claim Not Covered?

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3 February 2019
I have a situation.

I had my swampy serviced as it was making a loud banging sound. After the service, it continued to make the sound so they returned. During the Christmas period, it started again on and off. When I spoke with them, they said it was fine and they were experienced. Well the aircon caught fire and caused damage.

I decided to put in a claim with my insurance. I've had my insurance for 4 years. The insurers said because rooms are rented out to individuals rather than to a family, it falls under a boarding house which makes it a commercial property, therefore, they won't pay.

I checked my policy for a definition but there wasn't any so I checked the NT Government site and it states that a boarding house is where the owner can enter without notice, provides cleaning and meals and other things.

I don't provide any of these things and our agreement states that notice is required if I want to enter and their pds doesn't clarify boarding anywhere.

My questions are:

a) How can I dispute this decision based on my belief that it's not a boarding house as no service is provided

b) If I have not been covered during this 4 year period...can I get my money back?

c) I'm still waiting for the incident report and if it confirms the fire was started by the aircon how can i pursue a claim with the plumbing company that serviced it? They say they don't believe they were at fault.

Thanks in advance.


Well-Known Member
12 March 2017
a) Suggest you base your argument on the ATO’s determination of what is a boarding house and what is a commercial residential property for GST purposes as set out in ATO Ruling GSTR 2012/6 (please Google for full details).
This ruling includes an explanation of what constitutes a commercial residential property and also a description of what is a boarding house. There are also a number of examples to provide more clarity. I refer you to the example 3 set out in paragraphs 51 & 52 - renting rooms. The ATO does not consider this arrangement to be a commercial residential property. So if your situation is identical to this example, your insurer should pay up. If not identical you may still be able get a ruling from the ATO to support you.
b) Difficult to answer as I have not seen the policy wording or Questions asked of you when the policy was first taken out. Depends a bit on whether the insurer says you answered a question incorrectly or you did not disclose information to them that you should have. For example if you were unaware the property was commercial residential the insurer may only be able to cancel your policy from the date they became aware but still have to pay your claim.
c)You will need a conclusive technical report from a suitably qualified person as to the cause of the fire.

I do not give legal advice, just my opinion based on working for an insurance company for over 20 years.
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