If you’re reading this, you’ve probably either had a bad experience with an insurer or you know someone who has. On a daily basis I receive calls from individuals and businesses who are in a dispute with their insurer about cover extending to a claim or the value of the claim.
There is good news. As an insured, there are things that you can do to give yourself the best shot at your claim being paid, without setting one foot inside a Court room. For most insureds, litigation is expensive and they would be far better off resolving a claim out of Court.
Tip 1: Keep a record of conversations
If you’ve ever called an insurer you will have heard a message which tells you that the call is being recorded for ‘quality and training purposes’. The record keeping of an insurer (like many organisations) is not foolproof. For this reason, you should keep a record of all calls that you have with the insurer. Keep a record of the date and time of the call, the person you spoke to and the content of the discussion. If something important is discussed, follow up the discussion with an email to the insurer confirming the discussion and the information that they provided.
Don’t record your telephone call using an app on your mobile or a device which is attached to your phone. It is unlawful to record a telephone call with a device physically attached to the telephone and this may include an app on your mobile: Telecommunications (Interception) Act 1979 (Cth). In Queensland, it is lawful for a telephone call to be secretly recorded by an external device (like a dictaphone or an app on a computer) by a person who is a party to the conversation: section 43, Invasion of Privacy Act 1971 (Qld). If you are outside of Queensland, you should check the laws in your State or Territory about recording of conversations.
Tip 2: Get your policy documents
The starting point for any claim is to consider the wording of your insurance policy. In particular, you will need a copy of your schedule of insurance and policy wording (Product Disclosure Statement). You can request these from your insurer or insurance broker.
Most people look no further than their policy wording. You need to read the schedule of insurance with the policy wording. The schedule of insurance talks to the policy wording – it’s like using a key for a map, your schedule of insurance helps you understand how the policy operates for YOU. The policy wording is the same for many insureds but the schedule of insurance explains how you are covered.
Tip 3: Prove your claim and then prove it again (if necessary)
If you make a claim against your insurance – you are required to prove your claim and co-operate with your insurer. This means that you need to provide information to the insurer about the circumstances of the loss and its value. The types of documents and information you should provide vary from claim to claim. Some of the documents you could gather to prove your claim may include: a police report; statements; photographs; invoices; quotes; and, expert reports. Damaged items should not be disposed of if they are relevant to your claim.
Your insurer may appoint a loss adjuster or investigator to consider the value of your claim and whether the loss falls within the cover provided by the policy. Generally speaking, anyone appointed by the insurer to investigate the claim is an agent for the insurer. You should undertake your own investigations with third parties to consider whether the claim has been properly assessed. The cost of doing so may be recoverable against your insurer as ‘claims preparation costs’, however, policies generally require insureds to seek approval from the insurer before incurring these costs.
Once you have gathered as much documentation as possible and you have provided that to your insurer, the insurer may still have concerns. Depending on their response it may be necessary to provide more information or documents in support of your claim.
Tip 4: Request documents
You should request (in writing) copies of all documents that the insurer receives from third parties like reports, quotes, statements, invoices, photographs. You should also request copies of transcripts or audios from conversations with insurers if you think that you have been provided with inconsistent information during the claim process or, when you first placed your cover.
Many insurers subscribe to the 2014 General Insurance Code of Practice. See the full list of insurers subscribed to the Code here. The Code states that insurers will provide copies of reports and other information relevant to a decision to deny cover in certain circumstances. Click here to read a copy of the Code.
Tip 5: Make a complaint
If you are dissatisfied with how your claim is managed or with a decision by your insurer, you can submit a complaint. Your policy will outline the complaints process and should state a telephone number, address and/or email address for this purpose.
I often here from people that they are dissatisfied with the quality of communication from the insurer or the insurer’s agent – e.g. they weren’t provided with adequate information, their calls weren’t returned or they were required to speak to someone new every time they called the insurer. These are legitimate concerns by customers of any organisation and insureds are right to raise them with their insurers. However, it is important to get to the heart of the issue and to identify what is stopping your claim from being accepted or paid. If you cannot work out what the issue is – seek clarification from your insurer and/or advice from your broker, or an independent solicitor.
Once you have submitted your complaint, wait for the complaints resolution period to expire. If it expires and you do not hear from the insurer – follow them up in writing and by telephone. If the complaint does not lead to the claim resolving to your satisfaction, the complaints process should give you more of an idea about the insurer’s concerns.
Tip 6: Seek advice early
I speak to insureds at all stages of their claims. Some people contact me immediately after an event; some contact me years afterwards. Generally speaking, the sooner insureds obtain professional advice from their insurance broker or an independent solicitor, the better.
Tip 7: Request an internal review
An internal review is an opportunity for an insured to ask their insurer to review their decision about a claim and consider the claim again. You may provide the insurer with new information or evidence to consider. Your policy will explain the timeframes within which your insurer is required to make a determination. It is appropriate to seek legal assistance with preparing submissions to the insurer in support of your claim.
Once the insurer has internally reviewed its decision, you should seek legal advice about the most appropriate next step in your matter (if you have not already done so). The next appropriate step may be to apply to the Financial Ombudsman’s Service, start proceedings in the Court or apply to the Court for declaratory relief.
Dealing with insurance claims can be particularly stressful and for most insureds it is a foreign experience. It is important to speak to an experienced solicitor or, your insurance broker, at an early stage to ensure that your rights and interests are properly protected.