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Supply chain issues and betterment

Sung-ho has a small caravan/vehicle sales business. In July 2021, a window in one of the caravans needed replacing. Sung-ho obtained a quote to replace the window ($1,222) and lodged a claim with his insurer.

The insurer was delayed in assessing the claim but approved it in August. It turned out however, that receiving a replacement window from Australia would take some time, and there were general supply issues meaning that Sung-ho could not source a replacement window. The insurer thought that Sung-ho had gone ahead and replaced the window in August 2021.

Just before Christmas in 2021, Sung-ho’s broker told the insurer that the original window had been lost in transit. Another window had been sourced but it was too big, meaning that the window frame needed to be altered. The broker asked the insurer what Sung-ho needed to do next. The insurer said that Sung-ho had to obtain a quote so that the insurer could assess the new repair costs. The broker did not pass that message on to Sung-ho.

Having heard no further, Sung-ho bought the new window and had the caravan modified to fit it. The cost of this was $4,196, significantly more than the original July 2021 quote for $1,222. Sung-ho submitted the January 2022 invoice to the insurer for payment.

The insurer did not accept Sung-ho’s claim. It said that it would only pay the original invoice amount, less an excess. The insurer said:

  • it had lost the chance to assess the increased costs associated with the new window and the caravan alterations
  • the policy said that, if any part or component was no longer manufactured, the insurer only had to pay the last ‘list price’
  • the policy also required Sung-ho to obtain the insurer’s consent before any repairs over $1,500 could be carried out.

Sung-ho complained and the insurer maintained it would only pay him the original quote amount. Sung-ho then complained to FSCL.


Sung-ho thought that the second, higher, invoice should be paid, less the excess. He said that the insurer delayed in accepting his claim back in July 2021, and that there were delays in assessing his complaint through its internal complaints process (ICP). Further, he said that the higher invoice of $4,196 simply reflected what it cost to have the window replaced, because supply issues/inflation meant a simple like-for-like replacement window wasn’t available.

The insurer maintained its view that it should only pay the original quote amount, less an excess, and they paid Sung-ho that amount.


We told the insurer we didn’t accept the argument about only having to pay the last ‘list price’. This was because it wasn’t that the original window was no longer manufactured. It was simply that it never arrived.

We could also see that Sung-ho’s broker had suggested, while the complaint was in the insurer’s ICP, that the complaint be settled by Sung-ho, the broker, and the insurer, all splitting the difference between what the insurer had already paid Sung-ho, and the January 2022 invoice. This worked out to be about $991 each.

We spoke to the parties and said that the broker’s suggestion looked like a practical way for the complaint to be resolved, because:

  • Sung-ho had benefitted from ‘betterment’ – he now had a slightly better window than he originally had, because of the modifications.
  • The broker hadn’t let Sung-ho know that he needed to get a new quote in December 2021 before going ahead and having the caravan altered and the window replaced.
  • A new window was always likely to cost more six months later, because of the ongoing supply issues and rapid inflation. The insurer was always likely going to have to pay an increased amount to replace the window in January 2022, compared to July 2021. The insurer had also caused some delays.


The broker agreed to pay Sung-ho the $991. Although the insurer was reluctant to pay, in the end it agreed to pay, in part to maintain a good relationship with Sung-ho who held other policies with them. Overall, all the parties saw the suggested resolution as a good practical way to resolve the complaint, which was over (comparatively speaking) a reasonably low amount.

Insights for participants

This case shows the benefits of resolving complaints early without our Ombudsman having to issue a formal decision.

Also, although neither Sung-ho or the insurer got ‘everything they wanted’ from the outcome of this case, the outcome was something they could both live with.

Ultimately what won out in the end was that Sung-ho, the insurer, and the broker, were able to look past the ‘rights and wrongs’ and look at a practical way to put the matter behind them. It also showed the benefit in resolving a dispute by agreement – this can help to maintain an ongoing relationship between a financial service provider and their customer.