Heating Installation Cause Fire in Roof

We moved into a new home late last year, it was built in 2000. We decided to replace the single gas heater with central heating. I sought quotes from a variety of suppliers and settled on a system supplied and installed from an installer affiliated with a large specialist network in Australia. The quote was at the higher end but competitive and the decision to buy was based on the perception that this installer would carry out a high quality installation.

The issues started on the day of installation when I went out to get a photo of the unit (so I had a record of the serial number if needed for warranty) I found that the unit was not as agreed and quoted but the model below the agreed one. I pointed this out and the installer had to go back and get the correct model. There were 5 installers working on the day all young blokes with the boss on the job being older and seemed to me at the time to have a good handle on the install.

OK to the issue, 5 days after the installation we had a fire in the roof space that was caused by loose fill insulation covering a down light, fortunately the fire was discovered and dealt with prior to any major damage or more importantly loss of life as has the fire taken hold it would have isolated my 8 year old grandson's bedroom so the potential for this to have been tragic was real.

I contacted the store immediately after the fire was dealt with and advised them of the issue (approx 9 am) the person took my details and said he would let the Manager know who would get back to me. By 4:30 pm I had not been contacted so I rang back and was put through to the Owner/Manager who advised he would come out with an installer in the morning to have a look.

They arrived the next morning and had a look at the damage, the Manager was not accepting any responsibility at first until the installer called him up the ladder to have a look he then changed his tune somewhat, and while not accepting his guys cause the fire he then said he would as a "goodwill gesture" pay my excess. I responded that I would be making an insurance claim and that I would take advice from my insurer on how that would work. I pointed out that I was surprised that the installers would not check as a matter of course that as a result of their having worked in the roof space dragging ducting around etc, that they hadn't covered down lights with anything, given the known issue around down lights in roof space needing or be covered or kept clear. The response from the Manager astounded me as he tried to say it was my responsibility to have covers on the lights. There were shrouds around the down lights and the exhaust fans which were also dislodged by the installation causing one of them to be jammed.

The Insurance company completed the repairs last week and have commenced recovery from the installer which, once complete will see my excess refunded. On the day of the Insurance advising me that this had been completed I received a call (which went to voice mail, the first since the incident) from the Owner of the store advising that they had received notice from their insurance company that the repairs had been made and he would expect I now settled the balance of the invoice.

I am struggling with paying the full amount as I have little confidence in the quality of the installation and as the weather has not cooled down enough to use the heater I haven't had any real opportunity to test it, not to mention my concern with possible other issues.

Am I being reasonable in my response as I am thinking I will advise that I will not be paying the balance until I have had the installation checked by an appropriately qualified inspector and I have used the unit without issue for at least 3 months. Also considering the installation comprised 30% of the costs I expect a significant discount given the quality (or lack of) of the installation.