People who are paying higher premiums for their insurance may be expecting more from their policies in return and being disappointed when they don’t get it, the insurance and financial ombudsman says.
The scheme investigated a record 600 disputes between consumers and financial service providers, such as insurers, in the year to June 30, up 25% from the year before. It received 4293 inquiries and complaints.
Insurance premiums have risen significantly in recent years.
Stats NZ figures showed in March last year house insurance was up almost 25% compared to the previous year, contents insurance up about 28% and car insurance up almost 23%.
Insurance and Financial Services Ombudsman Karen Stevens said many cases were resolved quickly but a growing number were unresolved even after they had gone through financial service providers’ internal processes.
She said they would then need formal investigation by the Insurance and Financial Services Ombudsman (IFSO) scheme.
Stevens said part of the increase could be due to the cost-of-living crisis, and expectations about what policies should cover when premiums had risen.
Two-thirds of the disputes investigated were about general insurance, including house, contents, vehicle and travel insurance.
Stolen Range Rover, returned with meth contamination
Stevens said in one case a man complained that there were problems with his Range Rover, which was stolen and then recovered.
The insurer covered $37,000 in repairs, but the man said there were other problems like the air conditioning not working, water damage and possible meth contamination. But assessors said the problems were pre-existing or unrelated.
“The vehicle was recovered and was repaired in accordance with the repair condition in the policy, and the insurer had paid these costs,” Stevens said.
“The IFSO scheme can only consider whether the insurer had correctly applied the terms and conditions of the policy to the claim.”
She said, in this case, the insurer had met its obligations. But she said it showed the importance of understanding what a policy would cover.
“It’s important to understand that insurers rely on evidence,” Stevens said. “If you disagree with a claim decision, you must prove that there was damage missed, or that the settlement is unreasonable.”
rnz.co.nz
