Melbourne Law School - Research Publications

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Start date: 2020 × Author: Ramsay, Ian × End date: 2022 ×

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    The arduous work of making claims in the wake of disaster: Perspectives from policyholders
    Bourova, E ; Ramsay, I ; Ali, P (WILEY, 2022-11-01)
    With its promise of protection and peace of mind, insurance ownership is a key component of Australia’s national strategy to manage and spread costs of disaster recovery. We argue that an arduous and confusing claims process can have profound impacts on policyholders’ capacities to live safely in their homes as well as on their physical and mental health, finances, and levels of trust in insurers. Yet there has been little empirical research on policyholders’ experiences of putting this promise to the test by claiming on policies in the wake of disaster. In this article, we analyse interviews with policyholders who faced problems when making a building or home contents insurance claim following bushfire, flood, or storm. Evidence shows that aspects of claims processes place significant demands on policyholders’ financial and emotional resources, often in the aftermath of deeply traumatic and destabilising events. Our findings raise questions about the extent to which insurers’ claims handling processes and outcomes are consistent with requirements that call on insurers to respond efficiently, professionally, practically, and compassionately when and after disaster strikes.
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    'Honest, Fair, Transparent and Timely’? Experiences of Australians who make Claims on their Building, Home Contents or Comprehensive Car Insurance Policies
    Bourova, E ; Ramsay, I ; Ali, P (Monash University, 2021)
    In Australia, building, home contents and comprehensive car insurance are regarded as ‘essential’ financial products. Yet the limited research on the experiences of consumers who claim against these policies highlights problems with claims handling by insurers, who are required under the General Insurance Code of Practice (2014) to decide claims in an ‘honest, fair, transparent and timely manner’. These problems are especially apparent in the aftermath of natural disasters, and include inappropriate investigation practices and delays that exacerbate financial hardship for policyholders. In this article, we analyse the findings of our survey of policyholders who recently made claims on building, home contents or comprehensive car insurance policies. We show that while most claims are accepted, excessive resolution times, poor communication and problematic investigation practices by insurers make the claims process burdensome and overwhelming for a significant minority of policyholders. Our findings indicate substantial levels of exposure to financial loss for policyholders who accept cash settlements and problems with transparency surrounding withdrawn or cancelled claims. Our findings highlight issues with compliance with the legal frameworks governing insurance claims, as well as gaps in consumer protection that should be addressed in expectation of more frequent extreme weather events in the coming decades.