Insurance

Insurers must follow rules under the General Insurance Code of Practice (the Code), including acting professionally, honestly, and transparently.

If you believe your insurer isn’t following the Code, call the Australian Financial Complaints Authority (AFCA) on 1800 931 678.

Yes. You may be able to pay your excess in instalments, or have it deducted from any money you’re paid at the end of the claims process.

If your loss is greater than what your policy will cover, it’s treated as a ‘total loss’. In that case, your insurer should not ask for proof of ownership or a list of everything you lost. If they do, ask why they’re not following the Code.

Insurers use expert reports (e.g. from assessors, builders, engineers, hydrologists) to decide if your claim is covered under your policy.

You should request copies of:

• assessor/loss adjuster reports, and
• expert reports (building, engineering, hydrology, hygiene).

Be sure to read the reports to ensure they are accurate.

Insurers have 12 weeks to obtain expert reports and must provide them within 10 business days of you asking for them.

If your insurer arranged the repairs, they’re responsible for the quality and materials used.

Most policies include a lifetime warranty on repairs. Contact your insurer if there are any issues with the repairs.

Insurers must request any information they need from you within 10 business days of you lodging your claim. Once they have everything, they must decide the outcome of your claim within 10 business days.

If expert reports are needed, it can take longer, but a decision should be made within 4 months of your claim, unless there’s a valid reason for delay. In cases of a catastrophic event, a decision should be made within 12 months of your claim.

Insurers may offer a cash amount to settle part or all of your claim. If there are other settlement options, they must give you a factsheet explaining them.

Before accepting, check if your property can still be insured. Damaged properties are often uninsurable. You can:

• call other insurers, or
• ask your insurer to confirm in the settlement agreement that they’ll continue to insure you.

Temporary accommodation

Think about whether you’ll need temporary accommodation. If your home is unliveable, your insurer should cover this – check if it’s included in the cash settlement.

You are responsible for repairs

Once you accept a cash settlement, you are responsible for all repairs including any problems with them. You’ll need to hire licensed and insured contractors and obtain legal advice before signing any contracts.

You may discover further damage during repairs. Your insurer may or may not cover it, so seek urgent legal advice.

Some things you can do to ensure you’re getting a fair deal are:

• get quotes from at least two independent builders to ensure the payout covers repair costs,
• ask the builders to include contingency costs (these are unexpected costs you may face once work begins), and
• check that all damage is listed in the builder’s scope of works.

If quotes are more than the insurer’s offer, negotiate with your insurer for a higher amount.

Usually, settlements are final.

However, you can cancel a settlement if it was completed in the first month after the disaster happened. You’ll have no more than 12 months after the settlement date to ask for it to be cancelled.

If you felt pressured or lacked information when settling, seek urgent legal advice.

If your insurer has rejected your claim or made a decision you don’t agree with, you have options. The Disaster Response Legal Service NSW can help you understand your rights and take the next steps.

You can ask your insurer to review their decision. This is called an internal review. Your insurer generally has to complete a review within 30 days of your request. The review is done by someone within the insurer who wasn’t involved in the original decision and has the expertise to assess your dispute.

If you’re still unhappy after the internal review, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA).

AFCA is an independent body that helps resolve disputes between consumers and insurers. You must lodge your complaint within two years of the insurer’s final decision.

AFCA will ask the insurer to respond to your complaint no later than 21 days after you lodge your complaint. The insurer may contact you in this time and try to resolve the dispute with you. If you can’t sort it out, the insurer will send their response to you and AFCA. If you don’t agree with the insurer’s response AFCA may try to help resolve your dispute by:

• holding a conciliation conference
• contacting you and the insurer and trying to negotiate a resolution, or
• giving their opinion about how strong your complaint is (called a ‘preliminary view’).

This is a joint telephone call between you and the insurer. It is arranged by AFCA. An independent person called a conciliator helps you and the insurer to:

• put forward your points of view
• get a better understanding of the issues, and
• come up with options to resolve the dispute

If conciliation or negotiation doesn’t work, AFCA may ask for more information, or give their view about how strong each side’s case is. If you still can’t agree, AFCA will decide what will happen in a ‘determination’.

AFCA will look at what the law says and also what is fair. A determination is final. You cannot ask AFCA to review it again. You have 30 days to either accept or reject the determination. If you accept it, you and the insurer will have to follow the decision. If you don’t accept it, the insurer won’t have to follow it and you may be able to take other action against the insurer, including going to court. You should get legal advice before you go to court.

The Disaster Response Legal Service can give you advice about your options.

Insurance Company
Address 1
Address 2
NSW

Dear Sir/Madam,

Financial hardship request under Part 10 of the General Insurance Code of Practice

Claim number/Policy number

I am unable to pay my excess because I am in financial hardship.

Please [choose one]:

• take my excess out of any cash settlement at the end of my claim.
• allow me to pay my excess by instalments of [$] a month for [X] months. I look forward to hearing from you within 10 business days.

In the meantime please confirm that you will continue to process my claim without delay.

Yours sincerely

Insurance Company
Address 1
Address 2
NSW

Dear Sir/Madam,

Request for reports under Part 12 of the General Insurance Code of Practice

Claim number/Policy number

I am unable to pay my excess because I am in financial hardship.

Please provide me with copies of the documents listed below:

1. Assessors’ reports
2. Scopes of Works
3. Builders’ reports
4. Engineers’ reports
5. Hydrologists’ reports
6. Geotechnical reports

I look forward to receiving these documents within 10 business days.

Yours sincerely

Insurance Company
Address 1
Address 2
NSW

Dear Sir/Madam,

Request for time frame under clause 68(c) of the General Insurance Code of Practice Claim number/Policy number

Please give me an estimate of the likely timeframe and process for making a decision about my claim.

I look forward to hearing from you within 10 business days.

Yours sincerely

Insurance Company
Address 1
Address 2
NSW

Dear Sir/Madam,

Request for details of settlement

Claim number/Policy number

I refer to the offer of settlement that you have made to me.

Please give me details of the settlement offer.

In particular please provide me with any reports, documents and calculations that you have relied on to calculate this offer of settlement.

I look forward to hearing from you within 10 business days.

Yours sincerely

Insurance Company
Address 1
Address 2
NSW

Dear Sir/Madam,

Referral to Internal Dispute Resolution under Part 11 of the General Insurance Code of Practice

Claim number/Policy number

[Write a summary of things that you are unhappy about]

Please refer the matter to your Internal Dispute Resolution Process.

I look forward to hearing from you within 10 business days.

Yours sincerely

If you’ve been affected by a bushfire, storm or flood, we can help you with everyday legal problems including insurance claims and disputes, financial hardship, tenancy and Centrelink.

Call the Disaster Response Legal Service NSW on 1800 801 529.

For free advice about insurance problems, call 1300 663 464 or visit the Financial Rights Legal Centre website.