Insurers once again shown to be failing customers, not meeting expectations
Consumer groups including Financial Rights Legal Centre, Financial Counselling Australia and Consumer Action Law Centre, have backed calls from the insurance regulator the Australian Securities and Investment Commission, to improve insurance claims handling processes now.
This follows a release of a review of insurer’s actions since 2023 in addressing areas of improvement identified in its Report 768 Navigating the storm: ASIC’s review of home insurance claims, released in August 2023.
Quotes from Financial Rights Legal Centre Senior Policy and Advocacy Officer Drew MacRae:
“ASIC’s findings of continued poor claims handling align with the issues that we hear day in and day out at the Insurance Law Service. Ongoing delays, inadequate communications, and inconsistent treatment of customers who may need extra support are commonplace on our lines. Offering low ball cash settlements to elderly people who now need to project manage serious mould issues arising out of water ingress, is but one example of the types of treatment we see.”
“Last week, consumer groups called on insurers to act now to lift their claims handling game following Insurance Council of Australia’s announcement that a strengthened Code of Practice is at least two years off. Unfortunately, ASIC’s findings do not evidence a sector stepping up to meet the moment. While there may be some improvements here and there, the overall picture is just not good enough. ASIC’s review should be a wake-up call for insurers who seem to be asleep at the wheel.”
“Unfortunately, last week’s commitment from insurers to re-write and strengthen their code seems hollow given ASIC’s findings. How can consumers have confidence in a sector to meet strengthened commitments to their customers, if they can’t even meet current expectations laid out by the regulator?”
Quotes from Louise Hayes, National Coordinator Disaster Recovery, Financial Counselling Australia
“The Financial Counselling Sector continues to support and advocate for disaster impacted residents years after the event itself, despite the commitment of the insurance industry to do better and improve their claims handling procedures. Almost without exception, these same residents are vulnerable. There has been a clear deficit in insurers recognising and understanding trauma after a disaster, and the associated vulnerabilities to their customers.”
“Financial Counselling Australia supports ASIC’s call for insurers to improve their claims handling processes now and encourages a more focused approach by insurers to understanding vulnerability, particularly after a disaster.”
Quote from Rose Bruce-Smith, Senior Policy Officer, Consumer Action Law Centre
“There is still serious work to be done by Insurers in resourcing for complaints and external dispute resolution.”
“When insurers push cash settlements onto their customers, it also pushes immense risk onto someone trying to rebuild their life. It’s disappointing to see, over and over, that customers are still not being fully informed of their rights at this crucial point in a claims journey.”
“Pleased to see ASIC take a forensic lens to these issues and clearly, there is more to be done to meet current obligations before we move to rewriting them.”
ENDS
Media contact: Mark Pearce, Media and Communications Adviser, 0413 299 567, media@consumeraction.org.au
