Insurers acknowledge faults after 2022 floods
Esther Linder |
Hostile, aggressive and underhand behaviour by insurance companies in the aftermath of the 2022 floods has led to concessions of deficiency from the industry.
“Failures of systems, processes and resourcing” were acknowledged by the Insurance Council of Australia’s submission to a House of Representatives committee hearing how insurers responded to floods across Victoria, Queensland and NSW.
“The industry apologises to those customers for whom claims were not handled to the standard the industry strives to achieve,” the ICA’s submission said.
Across the four major floods examined by the inquiry, 303,407 insurance claims totalling almost $7.4 billion were lodged, according to the ICA.
Representatives from the financial counselling sector told federal MPs on Thursday how policyholders were coerced, gaslit and ghosted while trying to secure payments to repair their homes and livelihoods.
Zyl Hovenga-Wauchope, the executive officer of Financial Counselling Victoria, said a “substantial misalignment of interests” meant insurers were not providing proper help to people experiencing catastrophic floods and the aftermath.
He cited “very vindictive” behaviours including threats made towards policyholders, with case studies ranging from prolonged delays in stripping out waterlogged homes – leading to mould growth – to vulnerable people being given 24 hours to move from temporary accommodation while experiencing domestic violence.
“Their interests are to make you go away as quickly or as slowly as possible,” Mr Hovenga-Wauchope said of the delays, obstacles and poor communication by the insurance industry after each disaster event.
Vicki Staff from Financial Counselling Australia noted that roughly 75 per cent of clients experienced mental health issues, and linked the trauma of catastrophic floods to the ongoing ordeal of dealing with insurers.
Tactics such as quickly offering people cash settlements to finalise claims before proper rebuilding assessments were completed were described as “ambushing” those possibly suffering from PTSD.
“You’re not in the right frame of mind to be making such a large financial decision when you’re still reeling from a life or death experience,” Ms Staff said, noting one in five people in the NSW central west town of Eugowra had been rescued from their rooftops during the 2022 floods.
Laura Powell from Anglicare Victoria told MPs of the hostile behaviour some of her clients had experienced including finding out insurers had withheld building or claim reports for months for no apparent reason.
“I will say that they do lie,” she said of the insurers.
Independent MP Andrew Gee, whose electorate of Calare was affected during the central west NSW floods of November and December 2022, described the inquiry’s submissions as “a damning indictment of the industry and industry practices”.
The committee will hear from insurance companies and representatives across three further days of hearings.
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