Insurers asked to stop rorting

Valentine’s Day was the launch pad for the latest consumer campaign targeting unfair insurance tactics with the catchcry “show a little love”.

Against a backdrop of throbbing hearts, the Consumer Action Law Centre (CALC) yesterday launched a “dating video” on fairinsurance.com.au, calling on insurers to dump unfair policies.

Australians who believe their insurance claims have been unfairly denied and would like redress are invited to submit their experiences to CALC.

The advocacy group is pushing for insurers to not be exempt from unfair contract terms laws with which other sectors must comply. The organisation yesterday also released a report titled DENIED, which it says details how “shockingly” insurance companies treat some policy-holders.

Insurers are being asked to consider if policy clauses go too far in their favour and whether some of them cause bigger headaches than is warranted.

Meanwhile, the campaign features three actors who humorously discuss how their hearts were broken by  their “love interests”, which are spoofs of actual insurance companies.

In a short video, a woman tells of once dating a royal (RACV) whose tastes were too expensive; a man says his ex, Amy (AAMI), left him out in the cold when he was most vulnerable; and another recounts how he was dropped by the love of his life, Ally (Allianz), over a pre-existing medical condition.

Tongue firmly in cheek, CALC Chief Executive Gerard Brody said yesterday that even though insurance companies had a bad reputation, he thought their hearts were in the right place”.

“So today, for Valentine’s Day, we’re reaching out to the CEOs of all the major insurance companies to show us some love,” he said.

“Flowers, candy and fluffy toys are arriving at CEOs’ desks to encourage some love from the industry towards its customers.’’

While acknowledging that the Federal Government wanted the unfair terms laws extended to insurers, Mr Brody said “the industry could, and should, act now”.

“Many people lose out on their insurance because of unfair contract terms. And insurers are facing a big trust problem with Australians,” he said.

“People are getting huge shocks when their insurance claims are denied and yet insurers are the only industry who can legally include unfair contract terms in their contracts. Insurers should apply a fairness test to all terms in their contracts now.

“Every other industry must ensure that their terms and conditions protect legitimate business interests only, and that their own customers can understand the contracts. There’s no reason insurers should get special treatment.”

CALC said “it appeared to be very difficult for an individual to get a good result without engaging a lawyer” when they contested an insurer’s decision.

“A fair contracts regime for insurance is overdue. If insurers stick to the same rules as everyone else, it will even the playing field and give Australians a better chance of a fair outcome when they need it most,” the organisation said.

Opinion: Lawless insurance companies fail community expectations

Each time YourLifeChoices publishes an article about insurance companies’ poor treatment of policy-holders, we receive dozens of responses from members who have been conned into buying cover that falls short of expectations.

In the words of one of our members: “It is appalling that people under stress … are subjected to what is basically abuse and bullying …  and made to feel like a criminal simply because you believed someone who had sold you a product that was supposed to assist you in your time of need.”

No doubt the Financial Ombudsman Service (FOS), who is supposed to mediate insurance disputes, hears many similar stories each year. In fact, in its latest annual review it reported that complaints about general insurance had surged 26 per cent to 8100.

If, from a small population such as Australia’s, more than 8000 citizens a year feel they have been wronged by the very companies they pay to take care of them when the chips are down, then there is something very broken with the system.

The Consumer Action Law Centre’s (CALC) call out to the sector to be the “bigger person” and lift its own game is noble, but is it enough?

The advocacy group should be applauded for shining a light on the discrepancy that exempts insurers from laws on unfair contract terms. 

And CALC’s gimmicky campaign off the back of Valentine’s Day certainly was eye-catching. But I won’t be waiting around expecting insurers to become introspective about whether making outrageous profits is wrong.

Let’s hope that the Government acts sooner rather than later to implement reforms to the sector as it proposes. And at the very least, the Royal Commission into the Banking and Financial Services sector also ought to use its wide powers to make insurers explain how their policies are fair when roughly one in three claims are rejected.

Yesterday, CALC senior policy officer Susan Quinn told YourLifeChoices the insurance sector was not living up to community expectations.

“Even if the insurers are not breaking the law, to us it is clear that the law has to change,” Ms Quinn said.

A starting point would be to force insurers to abide by the same rules other sectors do and not write unfair contract terms which put the interests of consumers way below those of the company.

“In Australia today, protections for people with insurance are weak and hard to access,” says CALC. This must change soon.

Has your claim ever been rejected by an insurer? Do you think it is worthwhile buying insurance cover? Have you ever been delighted by exceptional service from an insurer?

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Written by Olga Galacho

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