‘Claim denied’: Report highlights insurance industry’s systemic failure

A new report has found that insurance companies are relying on maintenance or wear and tear exclusions to deny customers too many claims with almost half the decisions subsequently overturned on appeal.

“Incorrectly denying people’s claims citing ‘wear and tear’ or ‘lack of maintenance’, is wrong and causes incredible distress to the people on the wrong end of the insurer’s decisions,” said Consumer Action CEO Stephanie Tonkin.

The report, Making better claims decisions from the General Insurance Code Governance Committee (the CGC) presents the way insurers use information and data from complaints to improve business practices and compliance with the General Insurance Code of Practice.

“This report reveals that insurers are using poor quality expert reports to rely on exclusions to decline people’s home insurance claims,” said Ms Tonkin.

The report also found that where people complained about the insurer’s decision to decline the claim, 47% of those decisions were overturned.

“This glaring statistic alone tells us that insurers are incorrectly denying claims,” Ms Tonkin said.

“My advice is if your insurer declines your claim based on an ‘expert’ report it is worth your while to complain. And if the insurer does not change its mind, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA),” she said.


Media Contact: Mark Pearce Tel :0413 299 567    E:Mark@consumeraction.org.au

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