MANY months on from the April super-storm that swept through the Hunter, our community still bears the scars of substantial storm damage, with some residents remaining unable to return to their homes and many businesses still without repairs completed.
Delays and non-responsive claim managers are leading to widespread frustration due to unprocessed claims. Insured parties often remain uncertain of their rights to timely claims processing and appealing rejected claims.
A recent letter to the Newcastle Herald by a local Warabrook resident on 12 October 2015 voiced common concerns about the impact of insurance delays upon our region’s most vulnerable residents, especially the elderly. The writer’s 83 year old mother’s home had been so severely damaged that it was and remains uninhabitable, leaving her displaced 6 months later as she tries to recover from a hip replacement.
The letter raised critically important questions about the very broad time limits imposed upon insurance companies for processing insurance claims. These frustrations are being echoed across the Hunter as many claims by Hunter residents and businesses remain unresolved and with little to no information from insurers as to when they will be finalised.
Research by a leading Australian Community Legal Service recently revealed that 76% of consumers making insurance claims do not feel they receive accurate or sufficient information about the processing of their claims (Source: Collaborative Insurance Law Service survey).
While there are legislative controls of insurers, in Australia in most part insurers are regulated under a voluntary self-regulation model. There are a number of such codes, but the main one is the Insurance Council of Australia’s All General Insurance Code of Practice. Entry into the code is voluntary although all members of the Insurance Council of Australia offering insurance products covered by the code, must subscribe. There is a list of the insurance companies who subscribe to the code on the Insurance Council of Australia’s website.
The code is a good reference point for those insureds that are having difficulties with their insurer (particularly insurers who have subscribed to the code). It is a set of plain-English standards outlining appropriate conduct and time-frames for insurance companies to process claims.
This voluntary code compels insurers to keep their clients informed about the process of claims and finalise processing them within 4 months of being lodged unless exceptional circumstances exist. Where exceptional circumstances, such as the unprecedented number of claims lodged in our region after the April storms, the time limit is extended to 12 months. For those who have already had 6 months of disruption through delayed claims, it is understandable that a 12 month deadline seems unfairly generous to insurers.
For readers who feel their claims are taking too long to be processed, their first point of contact is their insurer’s claims manager and the company’s internal dispute resolution procedure or alternatively your insurance broker. If you remain dissatisfied, you can refer your complaint to the Australian Financial Services Ombudsman, to conduct an investigation and attempt to resolve your dispute. If you are still dissatisfied by the outcome, you should consult your lawyer.
For further information or assistance, please contact our commercial lawyer, Dean Frith. Call Baker Love on (02) 4944 3322 or contact us here.
