Insurer's Compensation for Fire-Damaged Property Sparks Controversy
Insurer's Compensation for Fire-Damaged Property Sparks Controversy
Hollard Insurance had initially declined the claim following a fire in October 2021, pointing to non-disclosure issues. However, upon the homeowner's appeal to the Australian Financial Complaints Authority (AFCA), the insurer revised its stance.
Hollard agreed to settle the claim with a payment of $415,937, allocating $300,437 for the building damage and $12,875 for contents, in addition to payments for temporary housing, non-financial loss compensation, professional fees, and accrued interest.
Despite this, the property owner contended the settlement was not fair, arguing his home and belongings were underinsured. Hollard defended the settlement, noting it was still higher than the policy’s insured amounts of $240,350 for the home and $10,300 for the contents.
The homeowner had purchased the policy through his bank, which acted as an authorised representative of the insurer. He claimed the bank's employee had provided financial advice without adequately understanding his financial situation or reviewing his personal circumstances. Additionally, he mentioned not receiving the policy documents.
In its ruling, the AFCA stated that based on the information provided, there was no substantial evidence that the bank's representative offered personalized advice.
“Though the complainant suggested that the representative promised to handle all the coverage details, the panel did not find sufficient proof that personal advice was given,” noted the AFCA.
The authority further emphasized that during an interview with the insurer, the complainant had confirmed receiving and reviewing the policy's product disclosure statement and insurance certificate, thus acknowledging the insured amounts and the underinsurance to reduce premiums.
“I didn’t foresee this type of incident happening, so I underinsured some things to pay a lower premium,” admitted the complainant.
With this acknowledgment, the AFCA supported the insurer's position to settle based on the confessed amount.
Furthermore, the AFCA dismissed the complainant’s request for additional legal fees amounting to $27,500, over and above the $5,000 already provided by Hollard. The complainant claimed that his cognitive impairment made self-representation unfeasible.
But the authority concluded that there was inadequate evidence to substantiate the extent of his cognitive impairment and asserted that Hollard had justifiable reasons to scrutinize the claim, leading to legal expenditures.
Published:Sunday, 4th Aug 2024
Source: Paige Estritori
Share this news item:
| Landmark Genetic Test Protection Gains Massive Support 17 Sep 2024: Paige Estritori The federal government’s recent move to prohibit the usage of genetic test outcomes in life insurance underwriting has garnered substantial endorsement from various sectors. - read more |
| Rising Home Insurance Costs Heat Up Household Finances 17 Sep 2024: Paige Estritori Recent data published by the Actuaries Institute indicates a surge in financial strain among Australian households brought about by climbing home insurance premiums. Remarkably, a staggering 1.6 million households are now feeling the pressure, marking a 30% increase over the last year, equivalent to an additional 360,000 households. - read more |
| Swiss Re Outpaces Expectations with Strategic Renewals and Diminished Catastrophe Claims 17 Sep 2024: Paige Estritori Swiss Re has reported a significant surge in net income, reaching $US2.1 billion ($3.09 billion) for the first half of 2024. This impressive performance has been largely attributed to favorable factors including reduced natural catastrophe claims, robust investment earnings, and strategic underwriting approaches. - read more |
| Autonomous Cars: Navigating the New Claims Terrain 10 Sep 2024: Paige Estritori The rapid evolution of automobile technology, particularly in autonomous vehicles, is poised to reshape the insurance landscape significantly, according to insights from Howden Re. Reinsurers need to anticipate a more complex claims environment that requires advanced strategies to effectively manage the potential complexities. - read more |
| Covering the Unexpected: A Guide to Trauma Insurance for Australian Families Trauma insurance, also known as critical illness insurance, is a type of coverage that provides a lump sum payment in the event that the insured suffers from a critical illness or injury. Unlike health insurance, which covers medical expenses, trauma insurance is designed to provide financial protection by helping to cover the additional costs associated with recovery from a severe illness or injury. - read more
|
| Income Safety Net: How to Choose the Right Income Protection for Your Lifestyle In the face of life's unpredictable twists and turns, few things are as disconcerting as the possibility of suddenly losing your ability to earn an income due to illness. Such events are often unexpected and can have significant financial repercussions that interrupt not only your flow of daily life but also compromise your future plans. - read more
|
| From Illness to Injury: Understanding the Scope of Income Protection Insurance In the uncertain times we face today, where both health and economic climates are unpredictable, safeguarding your financial stability becomes paramount. This is where income protection insurance steps in as an essential safety net. For many Australian families, it's the buffer that ensures life's financial commitments are met, even when ability to work is compromised. - read more
|
| 5 Key Factors to Consider When Shopping for Income Protection in Australia Welcome to our comprehensive guide on securing your financial future in Australia. In a world of uncertainties, income protection insurance plays a critical role in maintaining your financial security and peace of mind. - read more
|
An additional insurance policy that provides extra liability coverage beyond the limits of the insured's primary policies.