Insurance disputes lead NSW/Queensland floods complaints: AFCA

The Australian Financial Complaints Authority (AFCA) says insurance makes up most of the disputes it has received to date in relation to the NSW/Queensland floods.

About 100 complaints have been lodged as of Friday and 81 of the cases have to do with insurance while the remaining disputes concern banking products, AFCA said.

AFCA says the top three issues giving rise to the disputes are delay in claim handling, claim amount, and denial of claims due to a policy exclusion or condition.

Lead Ombudsman for Insurance Emma Curtis, who visited Lismore recently, acknowledged the scale and intensity of the disaster and the significant effects on communities.

“We encourage people to lodge a claim with their insurer if they have not already done so, and to talk with their insurer if they have any questions about their cover or claim,” Ms Curtis said.

“AFCA plans to visit more of the affected communities in coming months and will join community forums to help explain our role, and options for people affected by the disaster.”

The ombudsman also provided an update on Cyclone Seroja, a year after the storm hit WA’s mid-west region.

Slightly more than $500,000 in payments have been awarded for disputes, with insurance topping the list of cases handled to date.

AFCA received 25 complaints as at April 14, and with the exception of one involving a bank, the disputes are all related to insurers. The Insurance Council of Australia (ICA) declared the event a catastrophe on April 14 last year.

Claim amount, delay in claim handling and denial of claim because of an exclusion or condition are the main issues causing the insurance disputes, AFCA said.

Eight of the insurance disputes were about claim amount and there were six each for claim handling and denial of claim.

AFCA says most of the insurance complaints relate to home building – 19 in all – with two about home and contents cover and two in relation to commercial property. There was one complaint each about livestock and personal transaction accounts.

AFCA says 16 of the 25 cases have been closed and nine are still in progress.

The ombudsman says 75% of the complaints were resolved by agreement between the firm and complainant or in favour of the complainant, resulting in full compensation in 43% of cases and partial compensation in 57% of cases.

“We encourage people to work with their insurers, but we’re here to help if we’re needed,” Ms Curtis said.

She urged those who are thinking of lodging a complaint to take some time to prepare their case.

“First, think about what type of loss you’ve experienced and what sort of outcome you want to achieve,” Ms Curtis said.

“Then gather key documents, so you have them ready to support your complaint – for example, any photos, reports and other information that you have supporting your case.”

Last month ICA and its insurer members visited WA communities affected by the cyclone, meeting with policyholders who needed assistance with their claims.

ICA data shows the insurance industry has paid out about $351 million from some 9300 claims that have been lodged.