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What can I do if the insurer agrees to pay some, but not all of my claim?

TODD’S STORY 

Todd’s car was damaged in a car accident. Todd claimed on his car insurance for the damage with BIG INSURANCE COMPANY. He disagreed with the insurer’s assessment of the extent of the damage.

There may be many reasons why an insurer may pay some but not all of what you perceive to be the full value of your claim. In general, the most common reason is where the insurer’s assessment of the extent of damage differs from your assessment.

The type of problem will depend on the specifics of the claim, the nature of the insurance provided and also on the specific cover available under the relevant policy.  In general, if the insurer refuses to pay some, but not all of your claim, you may do the following:

  1. Request that the insurer provide you with written reasons for their decision. This is important because you need to determine what specific terms of the policy and what specific evidence they are relying onto arrive at their decision.

NOTE: If your insurer refuses to provide policy documents, written reasons or reports see our Fact sheet: How to use your Product Disclosure Statement

HANN’S STORY

Hann’s roof was damaged by a severe storm. Hann claimed on his home building insurance for the damage with BIG INSURANCE COMPANY. Hann was a former builder, and believed that the roof needed to be replaced and that the amount they were offering him was not sufficient to replace the roof. Hann requested BIG INSURANCE COMPANY provide him with written reasons for their decision, and a copy of the PDS. When Hann read the written reasons he saw that they were relying on an expert report that stated the roof could be repaired and did not need to be replaced.

  1. Obtain a copy of the Product Disclosure Statement (your insurance policy contract) and your Certificate of Insurance if you don’t already have copies, by writing to the insurer’s internal dispute resolution (IDR) section. Your insurer’s IDR contact details will be available in the member search function of the Australian Financial Complaints Authority (AFCA) website.
  1. Ask for a copy of any expert reports, quotes, or other evidence the in­surer is relying on by writing to the insurer’s IDR section. This is particularly important in car insurance and building insurance claims, where the insurer relies on expert reports / quotes to argue about the nature, cause and extent of damage.

TODD’S STORY (continued…) Todd requested BIG INSURANCE COMPANY provide him with copies of the expert reports/quotes they were relying on. When Todd read the expert reports he found contradictions. The report that the insurer relied on failed to consider some of the damage identified by the other report.

Todd wrote to the insurance company’s internal dispute resolution section pointing out the contradictions in the two reports and provided his own quotes and an expert report to support his argument that the insurer had underestimated the damage and cost of repairs.

4. If the insurer is relying on expert reports/quotes to support their position, you should read these reports and look for any flaws. Check the qualifications of the experts to check that they are qualified to provide an opinion on the issue in dispute. You should gather your own evidence in the form of quotes/expert reports which contradict the evidence on the extent of the damage provided by the insurer. This will be at your expense. If you cannot afford an expert report, lodge your dispute with the best evidence you can obtain.

IMPORTANT  Disputes between consumers and their insurers about the extent of damage will be resolved in favour of whichever party provides the most convincing evidence.

HANN’S STORY (continued…)

Hann requested BIG INSURANCE COMPANY provide him with copies of the expert reports they were relying on. When Hann read the expert reports he found numerous inaccuracies. He wrote to the insurance company’s internal dispute resolution section pointing out these inaccuracies and attaching invoices, statutory declarations, and an expert report to support his argument that the roof could not be repaired and needed to be replaced.

5. If your insurer wishes to pay you out for some but not all of your claim and you wish to dispute this, you should not agree or sign any documents stating that the payment is made in full and final settlement of the claim. If you sign to say that the claim is settled you cannot raise a dispute for further money later.

6. If you wish to have the insurer’s decision reviewed you should make a written complaint to the insurer’s IDR section. Their contact details will be available from the member search function of the AFCA website. In your complaint you should try to address all of the concerns and inconsistencies that the insurer has set out in their letter rejecting the claim and point out any flaws in their evidence, or any evidence in your favour.

If your complaint to your insurer’s IDR department has been rejected, it is recommended that you then proceed with raising a dispute with AFCA because:

  • It is free.
  • It is independent.
  • It can make a determination that is binding on the insurer. This means if AFCA decides the insurer has to pay then it has no choice.
  • You don’t have to accept AFCA’S determination if you don’t want to. If the decision goes against you then you can still go to court to pursue your case (although this may be expensive and risky, and is subject to time limits).

If you have paid for expert evidence you should make this clear in your complaint, although there is no guarantee you will be reimbursed. If there is evidence you believe is important that you cannot afford to pay for, indicate what this is in your complaint and why you cannot afford it.

You can call AFCA on 1800 931 678 and lodge a claim online at afca.org.au

Time limits apply to lodging a complaint at AFCA, you should get legal advice if you have any concerns.

More information about AFCA is available in our fact sheet here:

NEED SOME MORE HELP?

See Fact sheet: Getting help for a list of additional resources.

If you found this helpful and have further questions, why not try our Motor Vehicle Accident Problem Solver

Last updated: July 2019.