Hollard Insurance Partners Limited (Hollard) has been ordered by the Federal Court to pay a $2 million penalty after Hollard admitted that its serious claim-handling failures left a Victorian family living in appalling conditions, with their home ultimately deemed a total loss.
Hollard breached its duty of utmost good faith because of significant delays, poor communication and other failings in handling a home insurance claim by a family in regional Victoria, following a storm in October 2021 that damaged their home.
Despite initially accepting the claim for the home’s damaged roof, Hollard, Australia’s sixth largest householder insurer, delayed for 15 months before reversing course and rejecting the claim.
Because of the extensive damage to the roof, the family was left living in a deteriorating home that became so riddled with moisture, mould and decay that it is now uninhabitable.
ASIC Chair Sarah Court said the outcome was the first civil penalty ordered against an insurer for breaching its duty of utmost good faith and sent a warning to insurers about the devastating impact poor claim-handling and prolonged delays can have on consumers.
‘Hollard’s serious claim handling failures left a family in limbo for years and living in a home that was uninhabitable.
‘When Australians make an insurance claim, they are often facing some of the most difficult times in their lives. This decision confirms that insurers must act fairly, communicate clearly and make decisions without unnecessary delay, and must put their customers first.’
In late 2022, after the Insured family made a complaint to Hollard about the claim, they were offered $1,000 as a goodwill payment to settle their complaint. The family rejected this offer and subsequently made a complaint to AFCA. Hollard ultimately paid $1.55 million, including payments reflecting the total loss of the home, but took more than three years from when the claim was lodged to finalise those payments.
In delivering judgment, Justice Button said, ‘The saga experienced by the Insureds was extended and must have been stressful and traumatic. They were given the runaround in more ways than one, and lived in their ever-deteriorating home, as the saga wore on.'
‘It is incumbent on insurers to ensure that their claims handling accords with the duty of utmost good faith. Hollard’s contravening conduct here fell well short of that standard.
‘Some aspects of the contravening conduct are hard to fathom. In particular, the failure to appoint an engineer for about eight months after the need for one was identified on the first inspection, the glacial progress of the claim handling while the Insureds’ house decayed around them, and the progress of mould growth, cannot be explained simply as the product of staff busyness or poor communication with suppliers.
‘The capacity for harm to come to insureds holding home insurance is particularly acute given the value of the home as an asset in many Australian households, and the power disparity between insurer and insured in progressing claims. It is incumbent on insurers to ensure that their claims handling accords with the duty of utmost good faith. Hollard’s contravening conduct here fell well short of that standard,’ Justice Button said.
ASIC commenced the proceeding against Hollard in April 2025, alleging breaches of section 13(2A) of the Insurance Contracts Act 1984.
Hollard admitted that:
- despite the claim being made in October 2021, a recommended structural engineering assessment did not occur until August 2022, and it did not make a final decision on the claim until April 2023
- there were extensive delays, periods of inaction and poor communication throughout the claim including delays providing temporary accommodation, and
- the family home deteriorated significantly while the claim remained unresolved.
The matter is part of ASIC’s broader focus on insurance claim handling and consumer outcomes. ASIC has previously highlighted concerns about delays in insurance claim handling and their impact on consumers.
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Background
Hollard, with a 4.4% share of the general insurance market in Australia, is the sixth largest householder insurer in the country. It employs over 1,600 people and had an annual turnover in each of 2024 and 2025 of around $1 billion.
Hollard was formerly known as Commonwealth Insurance Limited (CommInsure) and was owned by Commonwealth Insurance Holdings Ltd. In September 2022, Hollard Holdings Australia Pty Ltd acquired all the shares of CommInsure and renamed it Hollard Insurance Partners Ltd (i.e. Hollard).
In 2024, ASIC issued a letter reminding general insurers of their obligations as Australian financial services licensees when handling insurance claims: ASIC letter calls on insurers to improve claims handling practices.
In 2025, ASIC completed a review of the claims handling process of 7 major insurers which identified significant room for improvement on home insurance claims: Home insurance claims handling improvements need to go further, ASIC says.
Claims and complaints handling failures by insurers is an ASIC enforcement priority for 2026: 25-273MR ASIC announces 2026 enforcement priorities.
If you have a complaint about your insurer, you should first raise it through the insurer's internal dispute resolution process. If a complaint remains unresolved, you can access free, independent dispute resolution through AFCA. Consumers can find more information about making a home insurance claim and resolving disputes at Moneysmart.