In 2017 Cyclone Debbie and her aftermath has wreaked a path of destruction through Queensland and into Northern New South Wales. Senior Associate Charles Lethbridge gives some helpful tips to people dealing with the insurance companies in this stressful time.
Most of us pay insurance premiums all our lives and rarely make a claim. This is why insurance companies make so much money and there are so many of them! Insurance companies do not make money by bending over backwards to payout people’s claims when they are made. Obviously, they make their profit by collecting more premiums from their customers than the claims that they payout on.
When you do have to actually make a claim under your insurance, whether your claim will be accepted and paid for is dealt with under the terms and conditions of your insurance policy. Most people wouldn’t know what the terms and conditions of their insurance policy are. The policy is usually a lengthy document with small legal type and is written in a language that most people would not understand anyway. With the plethora of insurers that are saturating the market at the moment, it is very difficult to be completely across what all of the different products cover or what they are offering. You may find that there are many “exclusions” in your policy that make the scope of its cover very limited indeed. If you are paying a very cheap premium, there is probably a very good reason for this! You may find that there are many “exclusions” under your policy that you were not aware of.
Whatever the case, here are some tips for dealing with your insurance company:-
- Report any damage immediately. Telephone your insurer and provide them with the details. Most insurance companies accept claims over the phone and they will provide you with a claim number. Make sure you keep a record of the claim number and put this into your phone or record it somewhere safe;
- Read your policy and the policy schedule! This usually comes with what is covered by the policy and the exclusions. Sometimes it is very difficult to understand whether a particular item or occurrence is covered by your insurance. If you have an insurance broker, contact them immediately and ask them to assist you with the claim;
- Get as much documentary evidence as you can to support the value of the claim for the items that have been lost or damaged. This doesn’t mean that you are going to have to go back 10 years and find the receipt for when you bought it but whatever evidence you can muster as to what the value of the item will help you in your claim for reimbursement from the insurance company. When it comes to damage to your house, see if you can obtain a couple of quotes for the damage in advance of the claim. In many cases the insurance company will accept the lowest of the 2 quotes and may not even need to send an assessor out to your house to assess the claim. Be wary of tradespeople who are appointed by the insurance companies. They obviously have an arrangement with the insurance company which puts them in a conflict position. You should always ensure that you obtain independent quotes or advice from reputable tradespeople;
- Get very clear on what your entitlements are under your policy and what items or occurrences are covered before you provide any statements or information to the insurance company. Some people unwittingly tell the insurance company details that will actually disqualify them from making a claim. We are by no means suggesting that you be dishonest with your insurance company but there are many facts and circumstances which they request from you which have no relevance whatsoever to your claim. In some cases they may be fishing around for details of your past driving history or other issues which have nothing to do whatsoever with the claim that you have made under your policy. You are not obliged to provide them with this information. Sometimes they ask for this information with the intention of declining your claim on the basis that you did not disclose certain information to them about your driving history, your financial circumstances or a past criminal history;
- Make sure you keep written or typed notes of all of your contact and discussions with the insurance company and/or the claims officer. This includes any “investigator” that they appoint to take statements and look into the matter. You should keep an accurate record of the discussion that you had with the claims officer on every occasion and either write this into a diary or type the details into your notes on your phone. This could become relevant down the track if they decline your claim and deny that you provided them with certain information or contacted them within a certain timeframe. Another very good idea is to make sure that you text or email confirmation to the claims officer of anything that they tell you. Quite often they will tell you that they are going to do something within a certain timeframe or pay for a certain item and then will deny it later or a different claims officer will say that there is no record of this! If you confirm all of your telephone discussions in writing it is very difficult for them to deny this at a later stage;
- Don’t accept what the claims officer tells you in relation to your policy! Don’t be afraid to challenge them in relation to what is covered by your policy. If you have paid your premiums faithfully for a long time with the same insurance company you can put it to them that you were unaware of the particular terms and conditions or exclusions of the policy and that these were not pointed out to you when you took the policy out with them many years ago. You can also state that had you known that these exclusions were applicable, you would not have taken out the policy with them and paid the premiums that you had over the past however many years! This is using their own disclosure arguments against them….
- Don’t be afraid to negotiate with the insurance company if they undervalue your claim or offer you an amount that is less than what you are expecting. Many insurers take advantage of these stressful situations and offer far less than what you are entitled to under the policy. If you have reinstatement and replacement cover, this includes the cost of the labour. Discuss this with them and tell them that you disagree with their views and you can threaten either to seek legal advice and sue them or take your matter to the Insurance Ombudsman. This will usually indicate to them that you are serious about pursuing your claim and you may find that this improves your negotiation position with them. If this does not work, don’t be afraid to go and get legal advice or to report them to the Ombudsman. You need to follow through with any threats of this nature.
It is our view that if you are having difficulties with insurance companies you should immediately seek independent legal advice and see what your legal rights are under your policy. Sometimes this may be uneconomical if you only have a small claim against the insurance company. However, most of the damage suffered by the Cyclone Debbie victims has been substantial and many clients will be dealing with claims worth hundreds of thousands of dollars. In these circumstances it is very important that you seek legal advice at a very early point to assist you. In certain cases lawyers will accept these claims on a deferred payment or “no win no fee” basis, although in most commercial litigation matters many lawyers charge their fees in advance.
What happens if we are not insured?
If you are not insured then you could face some difficult problems in the future. We have had enquiries from clients where mud and debris has washed into neighbouring properties causing damage to houses, fencing and sheds etc. where they have no insurance. Although the people that this has happened to may have insurance to cover it, the kicker is that their insurance company will come after you as being the cause of this.
It opens up some interesting arguments about who is at fault for the damage that has been caused by the movement of soil, trees or other matter due to the floods. The law of nuisance and damage caused by neighbouring properties is quite complex.
Once again, you should not just accept that you are liable for things that may have happened which emanated from your property. If you receive claims from insurance companies about these issues, you should immediately obtain legal advice as to your rights. It could be that there is no basis for the insurance company to claim these amounts from you. Sometimes when there is a freak weather occurrence, arguably it would not matter what precautions you had taken, the weather event was so extreme that it caused the damage in any event.
You may wish to remind the insurance company of the Billy Connolly movie “The Man Who Sued God” which very humorously portrayed the insurance industry seeking to deny payment of a claim made by the main character for lightning damage to his boat. The basis of their denial of the claim was that this was “an act of God”. Although the movie was typically tongue in cheek by Billy Connolly, it was certainly a very real satirical comment in relation to the insurance industry.
If you would like more information or want to obtain the best possible chance of a successful outcome in your dispute , please contact our Commercial Litigation Department Manager, Amanda Heather on direct line 07 5506 8245, email firstname.lastname@example.org or free call 1800 621 071.
We have an experienced dedicated Commercial Litigation team that practice exclusively in these areas.