An elderly Keilor couple has urged residents to read the fine print of their home and contents insurance policies after losing a lengthy battle against insurance giant AAMI.

Frank Guastalegname, 70, said the matter had been in litigation with AAMI since 2013 and he and his wife had spent almost $100,000 fighting the case.

Mr Guastalegname, who has 46 years legal experience, said it served as a public warning.

“We’re devastated,” Mr Guastalegname said.

“It’s been a costly nightmare. It’s very important to read your policy,” he said. “One has to be very careful … and whatever you do, read and keep your renewal notices.

“Sometimes wording of a policy is changed when a renewal notice is sent and it makes a difference.”

Mr Guastalegname’s legal firm, Caleandro Guastalegname and Co, represented his wife in court.

His wife sued AAMI over a failed home building insurance claim following the 2011 Christmas Day hail storms.

Supreme Court documents show she claimed the December 25 storms – which had dumped hail stones across Victoria – had “inundated” their family home which caused the slab to lift.

The documents stated the “inundation” was responsible for “heave of the clay soil beneath the foundation slab, causing the soil to expand and thus raise the slab. The raised slab lifted the wall and roof frames, causing cracking and consequential damage to the building”.

Although AAMI admitted “that the storm caused the inundation, the consequent heave in the soil supporting the concrete slab, and that such heave was the cause of the plaintiff’s loss and damage,” it denied liability on the basis of a “soil movement exclusion” in the woman’s policy.

In handing down his finding earlier this month, Supreme Court Judge Kim Hargrave found the soil movement exclusion was “badly drafted”, but it was “clear that AAMI intended to exclude indemnity for building damage caused by soil movement”.

The couple has until the end of the month to appeal the Supreme Court decision.