The 2011 Shonky Awards

With help from Queensland Legal Aid, we’ve found five particularly shonky insurance company tactics:

• Policyholders dissuaded from making claims Insurance company staff talked policyholders out of lodging claims at the first point of contact. Policyholders were told over the phone not to bother because they wouldn’t be covered, even though no claims assessment had been done. Some of these policyholders were able to lodge claims after repeated attempts.
• Claims summarily dismissed Claims were dismissed out of hand without any investigation. One company dismissed claims based on aerial photographs and said it would not send an assessor to the property. In at least one case, the photographs were taken after the flood waters had receded.
• Verbal assurances conveniently forgotten Verbal assurances from company staff or company reps that properties were covered for flood were dismissed or denied after claims were made. Many policyholders said they were verbally assured that their homes were covered for flood, but insurance companies routinely claimed they had no physical record of such conversations. That meant the promises didn’t count as evidence during the claims process. Insurers often claimed to have no recordings of calls in which policyholders were assured they were covered.
• Confusing and complex claims process Many policyholders were subjected to a lengthy, confusing, misleading and rude claims process. Assessors sped through inspections showing little interest; promised deadlines were not met; after lengthy delays policyholders were told that the insurer was still waiting for assessor and hydrology reports or that the final decision was still under review. Some claims were still not processed six months after they were lodged.
• Communication ‘clear as mud’ Letters from insurers about whether a claim was accepted or denied were so convoluted that some policyholders required a lawyer’s assistance to determine whether the insurer has agreed to pay or not. This crucial information was often buried in a sea of indecipherable verbiage, often toward the end of the letter. Many lawyers also had trouble figuring out what the letters said.