Causation, Expert Reports and Insurance Disputes
One of the biggest misconceptions in property damage and insurance disputes is that an insurer’s expert report is necessarily “correct” simply because it exists.
It is not uncommon for claims to be rejected based on engineering, hydrology, building or forensic reports obtained by insurers.
To most property owners, those reports appear highly technical, detailed and authoritative.
But in many disputes, the real issue is not whether a report exists.
It is whether the report actually establishes causation properly.
That is a very different question.
We regularly see situations where homeowners, builders and commercial owners accept a denial because they assume the insurer’s expert must know better.
In reality, most people would have no way of knowing whether the expert considered the correct evidence, applied the policy wording correctly, or whether the conclusions in the report are actually capable of withstanding legal scrutiny.
That distinction matters.
An expert may identify cracking, moisture, movement, corrosion or defective work — but that does not automatically determine whether a loss falls within or outside policy coverage.
These disputes are often significantly more complex than they first appear.
A good example is an AFCA determination involving water damage and alleged waterproofing failure, where the insurer denied the claim on the basis that the damage resulted from gradual deterioration and failed waterproofing.
However, AFCA ultimately found the insurer’s evidence did not adequately establish the alleged cause of the damage and the claim succeeded.
Importantly, the issue was not simply whether an expert report existed.
The issue was whether the conclusions drawn by the insurer’s experts were sufficiently supported by the evidence.
That is where legal and strategic analysis becomes critical.
Many people understandably assume that if an insurer has obtained an expert report, the matter is effectively over.
But causation disputes often involve overlapping legal, engineering and evidentiary issues that are not obvious to non-lawyers.
We have seen matters where claims initially rejected by insurers were later resolved after proper legal scrutiny was applied to the expert evidence and broader factual matrix.
In many cases, by the time legal advice is obtained, critical evidence has already been altered, repaired, discarded or lost.
That can fundamentally change the trajectory of a claim.
Early legal involvement is often not simply about commencing proceedings.
It is about understanding whether the claim has actually been assessed properly in the first place.
A denied claim is not always a bad claim.
Sometimes it is simply a claim that has not yet been properly analysed.
This article is general information only and is not legal advice.