Understanding insurance claims: What are your rights?

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Making a claim on an insurance policy isn’t as simple as a quick phone call to your provider.

If you need to make a claim, the process involves formally notifying your insurance company of your loss or damage. Because you’re requesting action and money, all insurance claims must be reviewed to ensure your policy covers what you’re claiming. This process can be a complex one to navigate.

Both you and your insurer have rights, responsibilities and obligations to uphold throughout the claims investigation.

Before claiming, you also need to consider whether you should make an insurance claim at all. This decision can affect your ability to get insurance later, as well as the cost of future premiums and your no-claim bonus. Some policies may also require you to pay an excess, which is the amount agreed upon to be paid in the event of a claim.

Whether you’ve made an insurance claim before or not, here’s everything to know about your rights as the policyholder.

Duty of utmost good faith
Regardless of the insurance claim you make or the policy you’re on, buying insurance involves entering into a legal contract.

Both parties (you and the insurer) must abide by a duty of utmost good faith, which is a promise to be fair and honest with all insurance claim dealings. This includes:

– Notifying your insurer of all risks that might influence their decision to insure you. Your duty of disclosure must be fair and honest under the Insurance Contracts Act.

– Not withholding relevant or accurate information from your insurer so it’s understood what claims can be made and what your policy will and won’t cover.

– An obligation to pay for your policy. If you fall behind in policy payments, insurers aren’t obliged to cover you.

What are your rights vs insurer’s rights?
When making a claim, you must also provide proof for your insurer to determine if the claim meets the terms and conditions of the policy.

If the claim is accepted, the replacement, repair or payment will be paid out. A paid insurance claim serves to indemnify you as the policyholder against financial loss.

It’s up to your insurer to work out the value of the claim to provide you with the appropriate benefit for your insurance contract.

For insurance claims to be successful, it’s crucial to understand you and your insurance provider’s rights. Although the specifics will vary between providers and polices, generally:

– Insurers have the right to investigate under Australian law, and you must reasonably cooperate.

– Insurers have the right to interview you about your claim, and you have the right for support and a defined start and finish time for the interview.

– Insurers have the right to ask questions about your claim, and you have the right to simply say you don’t know, rather than guessing answers. If you are asked to guess, make it clear you are only making an estimation.

– Insurers don’t have the right to force third parties, such as friends or family members, who aren’t insured by the claim, to participate in any investigations. As the policyholder, you have no obligation to ask your friends or relatives to participate in interviews.

Common insurance claims include:

Workers compensation claims
If you suffer a work-related injury or illness, you could be entitled to workers’ compensation so long as you make a claim within 12 months of the event.

Once the claim has been lodged, your employer has five working days to submit the Certificate of Capacity and Claim Form with their insurer. Your insurer will notify you within 14 working days with a result – accepted, disputed or pended, which can be a result of not having enough information.

You must be examined by a medical practitioner. However, your employer can’t be present. Depending on the extent of the claim, you may be put under surveillance to ensure continuation of workers’ compensation payments. It’s your responsibility to reasonably cooperate with any investigations. 

Health insurance claims
Health insurance protects you from large financial burdens resulting from an accident or illness. 

Claims can be made via smartphone apps, online, on the phone or at your health care provider. You’ll need paperwork from your doctor or medical appointments, health cover claim form and bank details. Waiting periods, out-of-pocket expenses or gap fees may apply. Some doctors offer direct billing with selected medical providers to streamline the process and avoid out-of-pocket costs.

Car insurance claims
Before making a car insurance claim, consider the damage and the costs of repair.

If the damage is minor and the cost of repairing likely to be less than the damage, there’s no point in claiming, as your future excess and premiums will increase.

You have the right to not claim and take the other driver to court instead. However, this option is risky. If you lose you would be liable for your own costs as well as the other party’s. You may only claim on your insurance. For the other driver’s insurer to be involved, they must lodge their own individual claim and pay their excess. Whether you need to pay excess and how much is dependent on your policy.

Even if you’re not at fault, pay your excess to avoid delays in the claims process. Fault can be disputed later, and a refund can be granted.

Check your product disclosure statement
Always review your product disclosure statement (PDS) when making an insurance claim. Your PDS outlines any policy exclusions, amount of excess you may need to pay and the general code of practice specific to your cover.

If you feel your claim hasn’t been handled properly or you’re unsure about your cover and policy information, you have the right to seek legal advice or the expertise of an insurance broker.

After making an insurance claim, regularly review your insurance policies to make sure they still meet your needs and circumstances. The benefits an insurer pays and the services included in your policy can change frequently, so it’s worth checking policies annually and comparing with others.

Written with information supplied by Perth City Legal

Have you recently had to make an insurance claim? How was your experience? What is your general opinion of insurance?

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Total Comments: 1
  1. 0

    Lodged an on line claim to GIO for House Insurance after a massive hail storm on 20th December last year. The Assessor visited in early January and, long story short, the whole roof has to be replaced plus the roofs of two sheds as well, plus Solar panels have to be removed and brought up to current regulations and replaced and painting of woodwork supporting the roof of the walkway all around the house. The outdoor entertaining area was of polycarbonate plus another large section joining the roof of the house and the holes in it are now BIG .. fun when it rains! We are still waiting over 4 months later and no start date yet. But, at least we had insurance to cover it!



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