A recent decision by the Australian Financial Complaints Authority (AFCA) has ruled against a homeowner seeking an $18,000 refund from Allianz.
The homeowner claimed that the insurer failed to adequately inform her about substantial increases in her optional flood cover premiums.
Initially, her monthly payments surged from $369 to $1277 in August 2022, a change she only noticed in March of the following year through her bank statements.
Allianz defended its position, citing that it had communicated with the homeowner according to her specified preference by sending renewal documents to her property. These documents, sent in 2022 and 2023, were not returned or marked undelivered. Despite receiving all pertinent documents between 2016 and 2021, the policyholder could not find written notification regarding the recent premium hike and suggested this might be due to postal issues at her multi-unit residence. She argued that additional notifications could have been sent via registered mail or email.
The insurance company justified the increased premiums by explaining that a reassessment had categorised the homeowner's property as being in an "extreme flood risk zone," which impacted the premium costs. While the homeowner referenced a local council's assessment classifying the location as low flood risk, AFCA determined that an email exchange from March 2020 between her builder and the council did not suffice for evaluating the flood risk.
AFCA noted that the complainant was given the option to provide her own flood risk assessment, either with an independent hydrologist or from a relevant authority, but chose not to do so. The authority concluded that the insurer had fulfilled its duties by sending all necessary documents and deemed it reasonable for the policyholder to be aware of the premium changes.
According to AFCA, the complainant was responsible for reviewing the policy documentation and monitoring the direct debit transactions. If dissatisfied, she should have contacted Allianz at the time of renewal or explored alternative coverage options. The delay of 19 months before addressing the issue did not support her case.
This ruling underscores the importance of consumers actively monitoring insurance communications and being aware of their policy details, especially after premium adjustments based on risk reassessments. It highlights the principles of consumer responsibility in financial management, particularly in the complex realm of insurance.
The decision may encourage insurers to review and possibly enhance their notification processes to mitigate similar disputes. For consumers, this serves as a prompt to diligently review insurance documentation and address any concerns promptly with their insurers. Additionally, property owners in high-risk areas may want to proactively engage expert assessment to ensure their risk categories are accurate and justified.
In an era where cyber threats are increasingly sophisticated, CFC Underwriting Limited has unveiled a unique opportunity for brokers to fortify their expertise through its newly launched Cyber Masterclass. This initiative offers a flexible, on-demand video learning series designed to advance brokers into proficient cyber insurance specialists at their convenience. - read more
New South Wales (NSW) is undertaking a detailed review of its Compulsory Third Party (CTP) insurance scheme as well as its lifetime care and support system. The Standing Committee on Law and Justice of the state's upper house has initiated this examination as part of their routine practice conducted every parliamentary term. The last thorough assessment took place in 2022. - read more
A recent decision by the Australian Financial Complaints Authority (AFCA) has ruled against a homeowner seeking an $18,000 refund from Allianz. The homeowner claimed that the insurer failed to adequately inform her about substantial increases in her optional flood cover premiums. Initially, her monthly payments surged from $369 to $1277 in August 2022, a change she only noticed in March of the following year through her bank statements. - read more
Insurance premiums for group life policies with long-term benefits have surged between 15% to 25% on average in the first half of the year, according to a mid-year market update from Marsh Australia. While the steepest increases affected those with adverse claims experiences, short-term rates and premiums for permanent disabilities remained relatively steady. The sector has also become more selective, with insurers adopting stricter underwriting standards, particularly eschewing high-risk industries. - read more
The federal government's initiative to accelerate housing development by relaxing certain building regulations has raised alarm within the insurance sector. Housing Minister Clare O’Neil announced changes on social media, indicating a strategic pause on parts of the National Construction Code to expedite building approvals and encourage the construction of much-needed homes across Australia. This move comes in response to challenges in the approval process, which often delays construction. - read more
Welcome to our comprehensive guide on car insurance in Australia! Whether you're a seasoned driver or a newcomer to the roads, understanding car insurance is crucial for protecting yourself and your vehicle against unforeseen events. - read more
Insurance jargon refers to the specialized terminology and phrases used within the insurance industry. These terms can often be confusing and complicated for those not familiar with the field. - read more
Car insurance is a crucial component of responsible vehicle ownership. It offers financial protection against unforeseen events on the road, providing peace of mind for drivers across the country. In Australia, navigating the world of car insurance can initially seem daunting, but understanding the basics can make the process smoother and more intuitive. - read more
When it comes to protecting your vehicle and your finances, car insurance is a crucial investment. In Australia, car insurance helps cover the costs associated with accidents, theft, and other unexpected events on the road. - read more
Knowledgebase
Coverage: The amount of risk or liability covered for an individual or entity by way of insurance services.
