Law Talks Episode: Summer storms, insurance woes – know your rights and what you’re covered for

Robyn: Good morning and welcome to another edition of 4CRB’s law talks and today, joining me from Attwood Marshall Lawyers is commercial litigation senior associate Georgia Taylor. Thanks for joining me, Georgia.

Georgia: Thank you very much for having me.

Robyn: Well, we are now into Summer. So today we’re going to be talking about insurance disputes, focusing on natural disasters, and being prepared for Summer.

Georgia, what is an insured event in the context of natural disaster during summer season weather?

Georgia: So, it’s an excellent topic to talk about right now in Queensland. A definition of a natural disaster, what you’ll find is set out in your insurance policy. So, each insurer, while they’ll cover all of the major events such as storm, cyclones, etcetera, the definition of your natural disaster will be specific to the policy which you’ve taken out, and you’ll always be able to find that in the definition sections of your PDS.

Robyn: So that’s the one that nobody reads.

Georgia: Absolutely.

Robyn: The devil’s in the detail. And what are some tips people should know when making an insurance claim for storm or flood damage?

Georgia: So, your storm or flood damage is probably the most frequent event, particularly here in Queensland and certainly in our neighbouring Northern New South Wales.

My top tip is evidence, evidence and more evidence. So, first and foremost, keeping yourself safe during those events is of the utmost importance, but making a list of your damaged or destroyed items and any information about the date, purchase model, etcetera. of the item that you’re claiming damages for. Taking photos or video of the damage to your home and property, making sure the insurer can ascertain where, for instance, flood levels got up to in the home so that they can ascertain as well what needs to be replaced and what might not have been damaged.

Collecting documents that may be relevant to your claim as well, such as your receipts, warranties, credit card, bank statements showing any immediate purchases which you had to make, such as tarps, anything you needed to do to do a make safe repair while you’re kind of waiting for your insurer to come out as well. And especially obtaining copies of videos or photos that maybe even members of your community have been able to take during the event, just to show the severity of the storm to the insurer in case any of those issues arise.

Robyn: And what advice would you give surrounding insurance policies? Just generally.

Georgia: Know your coverage I think is number one. Under the Insurance Contracts Act, which is the main piece of legislation which governs how insurers need to explain and also set out their policies to their insured, they will generally provide you with their minimum standard disclosure statement, which has most of those key details such as your specific inclusions, exclusions, how much you’re covered for your contents, home and building, etcetera, but the devil is really in the detail. As you said there, Robyn.

What you need to have a look at is your policy in depth. The full disclosure statement, what it will have in there is what is defined again. Perhaps as a natural disaster, defined as a flood. What may be included excluded. Mould is a big one and you’ll find that some damage for mould is included. Sometimes it’s excluded and then also really having a look to make sure that the sum that you’re insured for is going to be adequate.

Robyn: Yeah, it’s interesting, isn’t it? We’ve just seen such an increase in insurance policies and I know when I got mine this year, that I literally had bill shock, and I think some people attempted just to go with a cheaper price, but they’re not really comparing apples to oranges when they’re looking at the different policies and what actually covers what. So, as you said, it’s very important to understand exactly what you are or are not being insured for.

Georgia: And that’s precisely it, particularly with the cost of living going up, the cost of goods, something that you may have purchased two or three years ago for $1000, such as your television, may cost two and a half thousand dollars to replace. So, it’s really important to go through and make sure that for instance, even your specifically included items such as your mobile telephone, that you might have upgraded recently, is going to be included within those coverage details, so it’s always good to have a look at, always good to make sure that your insurer knows the quality of the goods that are in your home as well. For instance, your laminate floors versus hardwood floors.

How much is that going to cost to replace in this particular climate? Because that’s what the insurance is ultimately going to pay for.

Robyn: Yeah. So just on that, how important is photographic or evidence to document damage? And as you said, be able to demonstrate the quality of what you did have?

Georgia: It’s vital. That’s really the short answer to that. So of course, during the well if I can use the example of a flood event again, besides ensuring that your family is safe and there’s no immediate threats, you should begin to start documenting the damaged items immediately. Obviously, something’s come dry out, etcetera, but if you’re dining room table, for instance, went all the way up and was floating through the living room, then came down well, you’ll want to replace that whole table.

Take a photo of it. Take a photo of the details, if it’s timber, etcetera if it’s vintage. Have a look at what like for like might be on the Internet. Ensure that your insurer knows, ‘Hey, this was a damaged item. It is now irreplaceable, and this is what it needs to be covered for’, so that comes back to also then, of course, you’re the monetary value of your contents policy. If we’re going to talk in the terms of a dining room table, but if you don’t want just their standard coverage, five hundred dollars, because your dining room table is a beautiful antique worth two thousand dollars, then you need to be able to show the insurer the evidence of that.

Otherwise, I’m quite certain that every dining room table is going to be a two-thousand-dollar antique.

Robyn: What communication records should be kept once you start negotiations with your insurance company?

Georgia: Everything. A lot of correspondence is done by phone. It’s certainly the most efficient method when you’re going back and forth. If you’re going into emergency accommodation or something like that, you’ll find that your insurers employees and claims managers will be picking up the phone to you, saying we’re going to send this through. This is what we’re doing now. This is when you can expect it. Jot it down. Not only are you dealing with a very stressful point in your life where information might be going in and out and difficult to retain, it’s also important looking down, I suppose from a litigation perspective, which is where I always come from, is that if you can sit down and say Georgia on this occasion, the insurer promised me XY&Z would happen and I wrote it down and I sent it to them in an email, it’s evidence. That’s what you need.

Robyn: OK.

Georgia: Versus going back to the insurer, trying to find a recording of the phone call and spending weeks going back and forth, it’s also then helps you to say okay, yes, I’ve spoken to the insurer about bedroom number one, but how about the oven that now needs to be replaced. So, as much as what you can do, perhaps make a note in your diary of who you spoke to, how long for, and what about. Keep a notes tab in in your iPhone if you can do that. Jot it down in a notebook sitting in your kitchen and then I always recommend following up with your insurer via email to say thank you for your time, here’s what we discussed.

Robyn: Just recap what’s been discussed.

Georgia: Precisely.

Robyn: Great advice and what advice do you have for people who may struggle to communicate with their insurance company, or they’re just not being called back?

Georgia: Keep calling. I think each person will require a different level of communication to be able to feel comfortable with their claims process, particularly after a natural disaster. You can imagine that maybe one out of ten of your neighbours is going to be with the same insurer. There will be a small amount of contact people for that insurer within that district within that region that will need to be dealing with a number of different parties with various levels of damage. Similarly, if you need immediate assistance with building for your home or tradesmen, all of the tradesmen in that industry will be answering to all of the insurers.

Robyn: Of course.

Georgia: So, it’s certainly you know situationally dependant but always call your insurer. Always send them an email. If you’re finding after a week or two, you’re not getting the responses, attempt to escalate it within the team. They always have then your external internal dispute resolution processes as well that you can generally access on their website. If it’s getting really damning and where two or three months down the track and you haven’t heard from them or you don’t have any specific dates again, for instance for building repairs, then you can always look at getting some independent legal advice about your options, or otherwise you could also look at making a complaint to the Ombudsman services.

Robyn: OK. And what can people do to find help whilst they’re waiting? They’ve put in the insurance claim. They’re waiting for a decision. What can they do to access help while they’re waiting for that process?

Georgia: So, in terms of help, maybe some more information about what the insurance claims going to look like. Your insurer will generally send you out a statement of what’s going to happen and when it’s going to happen and what you can also expect out of that process. Depending on the type of claim that you are making. Alternatively, if you need some more in depth advice or options about what you can or cannot do during that time, then you can always have the option of getting legal advice as well.

Robyn: And if someone is unhappy with the insurance company decision, what can they do?

Georgia: So, your first step would be to obtain advice. You can also then usually escalate to the internal dispute processes within the insurer to ask for a review of the decision. There is generally review panels within those teams. Generally, where we go though is the Ombudsman service, AFCA, the Australian Financial Complaints Authority, which has effectively the jurisdiction to deal with any insurance disputes up to usually the value of around $2,000,000. So it captures a lot of what our main disputes are centralised around, and those appeals of decisions will be generally an insurer saying, hey, we say that this is excluded and you’re saying no, it’s not. Or this is the reason why there’s more extensive damage and why it should be covered. So, you can always then go straight through to AFCA, which is a free service and low risk service as well.

Robyn: And what can people do to ensure they are safeguarded when it comes to insurance policies for the future?

Georgia: So, your insurance policy is arguably one of the most important documents that you’ll have to safeguard your assets. So, in the first instance, if you’re not too comfortable after reading your policy or your disclosure statements from your insurer, you’re always welcome to contact the insurer who you’re looking to either maintain your coverage with or change your coverage to in order to seek advice on the policy and get some explanations about what things mean.

Other than that, you could also get advice from an insurance broker, particularly if for instance you have a property that might be classified as a farming property. So you might want particular farm insurance. You might have different assets that you want covered under that home and contents insurance policy, such as the vintage car that you want to encapsulate in there.

So, always worth then maybe taking that step, getting some professional advice. Ultimately, at the end of the day, it’s the peace of mind that’s going to come through to that, but always start with making sure you can pay your insurers, review those policies. I personally love a policy, but not everyone does. But have a look. Ask the questions. Make sure that you feel comfortable and really do a good audit as well of what you want insured and why.

Robyn: Yeah, it’s great advice Georgia and it is, I dread renewal time when I get the dreaded document come through on the renewal and I have to go through to make sure what’s covered, what isn’t covered, and do all that, and I am so pleased when it’s when it’s over and I’ve renewed and don’t have to think about it for another year.

Georgia: Exactly.

Robyn: Great advice today. Thanks very much for joining us today.

Georgia: Not a problem at all.

Robyn: You’ve been listening to law talks here on 4CRB, which you can hear every Friday morning from 9 o’clock.