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Consumer advocates call on insurers to act now at flood insurance inquiry

Urgent changes needed to improve claims handling process.

Last updated: 31 January 2024

A number of consumer advocacy groups - including CHOICE, Financial Rights Legal Centre, Consumer Action Law Centre, and Financial Counselling Australia - will be the first to appear today and tomorrow at a public hearing for the parliamentary inquiry into insurers' responses to 2022 major floods claims

The hearing follows a joint submission and other submissions from consumer groups which highlighted a number of issues with insurance claims following the 2022 floods. 

Consumer advocates are calling on insurers to act now and address the multitude of problems people currently face when attempting to claim on home and contents insurance following floods and other extreme weather events.

Quotes attributable to Bea Sherwood, Senior Campaigns and Policy Advisor at CHOICE

"We are hearing time and time again that people are being re-traumatised by their insurers. Some people are forced to wait months or years for an outcome, while others have their claims denied unfairly. There is also an extreme lack of transparency when it comes to keeping customers informed on the progress of their claim." 

"Insurers can and should be doing more to help people successfully navigate the claims process in the aftermath of extreme weather events like the floods of 2022. While we look forward to the outcome of this parliamentary inquiry, insurers already know what needs to be done to better support consumers. We don't see why they can't start now." 

Quotes attributable to Julia Davis, Senior Policy & Communications Officer at Financial Rights Legal Centre

"The repercussions of the floods extend beyond financial strain for consumers. The consequences have been deeply personal, with individuals facing enduring emotional stress, trauma and strained relationships in the aftermath of the floods and to this day."

"There are problems that our clients face today that could be addressed by the insurance industry right now, with immediate, unilateral action. For a start, insurers could work to better resource claims handling, communicate with consumers in a consistent, transparent and compassionate manner, and provide appropriate support to customers that are vulnerable." 

"We know that the Government needs to step in and address affordability issues, fund mitigation projects, and better coordinate data and responses. In the meantime, however, insurers can and should clean up their own house." 

Quotes attributable to Vicki Staff, National Coordinator for Disaster Recovery at Financial Counselling Australia 

"In the wake of natural disasters, insurance is an essential tool in every household's financial resilience toolkit. Consumers should be able to trust insurers to be there when the worst happens. As we noted in our submission, there are instances where clients have felt coerced, gaslit and ghosted. This is particularly concerning given we know that people are already doing it tough, with our recent data showing that 75% of flood-affected clients are suffering from mental ill-health, and almost 90% are struggling to pay for basic necessities.

We welcome this inquiry as an opportunity to address the problems and find solutions for all Australians."

Quotes attributable to Philippa Heir, Managing Lawyer at Consumer Action Law Centre 

"This is a system that is weighted against consumers in favour of insurance companies, and it has to change." 

"We hear all the time from people subjected to unfair denials based on poor quality expert reports."

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Stock images: Getty, unless otherwise stated.