Australian insurers face huge criticism in TV report as Royal Commission looms

Australian insurers face huge criticism in TV report as Royal Commission looms | Insurance Business

Australian insurers face huge criticism in TV report as Royal Commission looms

Insurance companies’ conduct is to fall under the spotlight next week when the financial services Royal Commission gathers in Queensland – and now a new TV report has shed light on criticism surrounding their actions.

According to an ABC report, concerns are swirling over last year’s tropical cyclone Debbie – from which losses reached $1.7 billion making it the second most costly disaster in the country’s history. An investigation from it’s 7.30 programme highlighted the frustrations of several claimants struggling to get payouts – with some still not able to return to their homes.

One claimant, Mel Deacon, alleged a tarpaulin Youi paid for to cover holes in her roof actually caused far more damage.

“The tarpaulin failed – it didn’t fit on the section,” she claimed. “So, water started coming through, mainly in the month of May, and that caused all this extra damage – a lot of mould damage.”

The report said Youi refused to fix the additional damage prompting Deacon to seek help from the Mackay Regional Community Legal Centre. It went on to state that she eventually lodged a dispute with the Financial Ombudsman Service and won her case – Youi was ordered to obtain new quotes to fix the additional damage. However, her lawyer alleged that the company only got one quote – “the cheapest builder they had used the entire time” – and settled the claim. Deacon was paid $161,000 but she believes the cost of repairing her home, based on her own quote, exceeds the $270,000 it is insured for.

“The night before the impact of Cyclone Debbie, Ms. Deacon telephoned Youi to purchase additional Insurance,” the insurer told ABC in a statement. “Ms. Deacon’s purchase of additional insurance was subject to an embargo due to the impending impact of Cyclone Debbie. It is common practice for insurers to place embargos on new insurance or increases to sums insured prior to an event that is likely to happen.

“Despite the PDS exclusion, Youi honoured Ms Deacon’s building claim. Ms. Deacon has stated that she made a complaint against Youi with the Financial Ombudsman Service (FOS) and, to date, Youi has paid her approximately $161,000 pursuant to her claim. This matter is with FOS and awaiting further determination.”

Meanwhile, in another case highlighted in the report, the Taylor family described a 15-month battle with Suncorp stating that the insurer changed its offer after they met with local federal MP George Christensen.

“We managed to get a big improvement – something like $100,000 in terms of an extra payout for her,” Christensen stated.

“There have been problem cases we’ve seen from just about every insurance company – pretty substandard assessments,” he went on to say.

“Suncorp received almost 20,000 claims, spread over approximately 1,000 kilometres and across two States,” Suncorp said in its response to ABC. “Finalising all insurance claims for a major event of this scale takes time, and we work hard to help our customers recover as quickly as possible. However, we acknowledge that in a very small number of cases, our processes have let us down. We set high standards for ourselves and we apologise to any customer where our service has fallen short of expectations. We understand the importance of progressing claims as quickly as possible, and delays are rarely, if ever, the result of inactivity on a claim. We continue to have a dedicated team in place for tropical cyclone Debbie customers to ensure that we deliver on our commitments.”

 

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