When a storm damaged a regional Victorian couple's home in October 2021, they turned to their insurer expecting the quiet assurance that a policy promises. Instead, Hollard Insurance subjected them to nearly two years of delays, silence, and a claim rejection built on non-expert opinion — leaving their home to decay around them. Last week, the Federal Court ordered Hollard to pay $2 million in penalties, marking the first time Australia's corporate regulator has pursued legal action against an insurer over a single policyholder's claim. The case stands as a reminder that the duty of good faith
Hollard fined $2m for claim delays that left home uninhabitable
A couple was left without a habitable home for years due to claim delays, eventually receiving $1.5 million in settlement after the property became a total loss.
Delays left the house uninhabitable while Hollard rejected the claim
Mark
So Hollard accepted the claim at first, then rejected it eighteen months later. What changed?
Mimi
Nothing changed about the damage itself. The roof was damaged by the storm in October 2021. But Hollard kept delaying inspections and reports, and when it finally rejected the claim in April 2023, it based that rejection on a non-expert opinion—ignoring the expert assessments it had already received.
Luke
Wait—so Hollard had expert reports saying the damage was real, and it rejected the claim anyway? On what grounds?
Mimi
That's the question ASIC asked too. The court found that Hollard breached its duty of good faith by ignoring those expert reports and using a non-expert opinion instead.
Mark
And the couple—they just lived in an uninhabitable house for all that time?
Mimi
Yes. They were waiting for temporary accommodation that Hollard was supposed to arrange. The delays meant the property deteriorated further, exposed to the elements.
Luke
But eventually Hollard paid them $1.5 million. So the couple did get made whole, at least financially.
Mimi
They got a settlement after they complained to the Financial Complaints Authority, which independently confirmed the storm damage. But they'd already lost years and a home.
Mark
Is this common? Do other insurers do this?
Luke
That's what we don't know from the reporting. This is ASIC's first enforcement action against an insurer over an individual claim, so either it's rare, or it's the first time the regulator has chosen to prosecute it.
Mimi
ASIC's message is that other insurers need to take note. The penalty is $2 million, plus legal costs.
Mark
What does Hollard say about all this?
Luke
The reporting notes that Hollard was approached for comment, but no response is included. So we don't have their side.
The Pulse
- A storm-damaged roof became the starting point for a two-year ordeal, as Hollard repeatedly delayed inspections, repairs, and temporary housing while the couple's home continued to deteriorate unprotected.
- In April 2023, eighteen months after accepting the claim, Hollard rejected it entirely — relying on a non-expert opinion while setting aside its own prior expert assessments of structural damage.
- The couple escalated to the Australian Financial Complaints Authority, which independently confirmed the storm had caused structural damage, forcing Hollard to reverse its decision and settle for over $1.5 million.
- ASIC pressed forward with legal action even after the settlement, arguing the pattern of delay, poor communication, and disregard for expert advice constituted a breach of the Insurance Contracts Act's duty of utmost good faith.
- The Federal Court agreed, ordering Hollard to pay a $2 million penalty to the Commonwealth within 28 days — the first such enforcement action over an individual claim, putting the entire insurance industry on notice.
When a storm damaged a regional Victorian couple's home in October 2021, they turned to their insurer expecting the quiet assurance that a policy promises. Instead, Hollard Insurance subjected them to nearly two years of delays, silence, and a claim rejection built on non-expert opinion — leaving their home to decay around them. Last week, the Federal Court ordered Hollard to pay $2 million in penalties, marking the first time Australia's corporate regulator has pursued legal action against an insurer over a single policyholder's claim. The case stands as a reminder that the duty of good faith is not merely a contractual formality, but a moral obligation with consequences.
In October 2021, two days after a storm damaged their regional Victorian home, a couple filed a claim with Hollard Insurance. What followed was nearly two years of delays, miscommunications, and reversals that left their house uninhabitable and exposed to the elements. Last week, the Federal Court ordered Hollard to pay $2 million in penalties — a landmark ruling marking the first time ASIC has taken legal action against an insurer over a single policyholder's claim.
Hollard, one of Australia's largest privately owned insurers, initially accepted the claim but then entered a prolonged pattern of postponement. Inspections stalled. Repair work never began. Temporary accommodation was slow to arrive. The home continued to deteriorate with no protective measures in place. Then, in April 2023, Hollard rejected the claim outright — citing a non-expert opinion while disregarding prior expert reports that had already documented the structural damage.
The couple refused to accept the decision and lodged a complaint with the Australian Financial Complaints Authority. The independent body found in their favour, confirming the storm had caused structural damage to the roof. Faced with that finding, Hollard reversed course and settled for more than $1.5 million, covering the total loss of the building and temporary accommodation costs. But the years lost and the home destroyed could not be undone.
ASIC pursued its lawsuit regardless. The Federal Court found that Hollard had failed to promptly assess the damage, communicate clearly, consider expert advice, or protect the property from further harm — conduct that breached the duty of utmost good faith under the Insurance Contracts Act. The $2 million penalty, payable to the Commonwealth within 28 days, carries a message beyond this single case: insurers across Australia are now on notice that delays and the dismissal of expert advice in claims handling can attract serious regulatory consequences.
In October 2021, two days after a storm tore through their regional Victorian home and damaged the roof, a couple filed an insurance claim with Hollard. What followed was a cascade of delays, miscommunications, and reversals that would stretch across nearly two years and leave their house uninhabitable. Last week, the Federal Court ordered Hollard to pay $2 million in penalties for how it handled that single claim—a landmark decision that marks the first time Australia's corporate watchdog has taken legal action against an insurer over an individual policyholder's case.
Hollard, one of Australia's largest privately owned insurers with annual revenue around $2.3 billion, initially accepted the claim. But the company then began a pattern of postponement. Inspections were delayed. Reports were delayed. Repair work stalled. The couple waited for temporary accommodation that never materialized quickly enough. Meanwhile, their damaged home continued to deteriorate, exposed to the elements with no protection in place. In April 2023—eighteen months after the initial claim—Hollard rejected the claim entirely. The company based its rejection on a non-expert opinion, despite the fact that prior expert assessments had already documented the structural damage to the roof.
ASIC, the corporate watchdog, alleged that Hollard had breached its duty of utmost good faith under the Insurance Contracts Act. The regulator argued that the combination of decision-making delays, poor communication, and the company's decision to ignore expert advice had exposed the couple to unnecessary and prolonged harm. The Federal Court agreed. In its judgment, the court found that Hollard had failed to promptly assess the damage, failed to clearly communicate with the couple throughout the process, failed to consider the expert reports it had received, and failed to properly protect the property from further deterioration.
The couple did not accept Hollard's rejection. They lodged a complaint with the Australian Financial Complaints Authority, which determined that the storm had indeed caused structural damage to the roof. Faced with this independent finding, Hollard reversed course and agreed to pay the couple a cash settlement of more than $1.5 million—a figure that reflected the total loss of the building, plus costs for temporary accommodation. But by then, the damage was done. The property had become uninhabitable, and years had passed.
ASIC proceeded with its lawsuit even after the settlement was reached. The $2 million penalty that the Federal Court ordered Hollard to pay goes to the Commonwealth of Australia and must be paid within 28 days. The company has also been ordered to cover ASIC's legal costs. For the regulator, the decision carries a broader message. This is the first enforcement action ASIC has brought against an insurance company over the handling of an individual claim, and the signal is clear: other insurers are now on notice that delays, poor communication, and the dismissal of expert advice in claims processing can trigger regulatory action and substantial financial penalties.
Notable Quotes
ASIC alleged the combination of delays in decision-making, poor communication and ignoring expert advice exposed the couple to unnecessary and prolonged harm.— ASIC's case against Hollard
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Climate & Environment