Insurers ‘worse than the disaster’, say extreme weather victims

Making an insurance claim after a natural disaster can be more stressful than enduring the extreme weather event, according to people who have done both.

Making an insurance claim after a natural disaster can be more stressful than enduring the extreme weather event, according to people who have done both.

“The actual event is traumatic (but) the worst by far is dealing with insurance and trying to get your life back,” a claimant who lost their family home in the Black Summer bushfires said in a recently published Melbourne Law School analysis.

Another called the claims process “the biggest trauma” ­because she felt she had no control over the outcome: “The fire was nothing compared with what I went through with that.”

Dealing with insurers was ­arduous, confusing and time-consuming and could leave claimants who had trusted their policies to protect them disillusioned and financially and emotionally distressed, according to the study of responses from 30 people who made claims against their insurers.

“There is a need for a more trauma-informed approach to dealing with people who have been through disasters, who are navigating a whole range of stresses – psychological health issues, living in insecure housing – all of that needs to be taken into account,” research fellow Evgen­ia Bourova said.

The 24 women and six men had faced storms, hail, floods, bushfires and lightning strikes in the three years to early 2021, and had sought advice from the Fin­ancial Rights Legal Centre after running into trouble with insurance claims on significantly damaged property.

Rejection or partial rejection of claims based on the limits of the policies and months of delays in reaching those resolutions were among the problems, but claimants’ stories showed the difficulties began before that.

Collection of documents and managing phone calls and appointments could amount to the equivalent of a part-time job.

One woman who rang her insurer 44 times was allocated eight different case managers; another, with a child and a 79-year-old mother, was told the insurer could approve only three nights accommodation at a time and spent several months at the onset of the Covid pandemic moving between places, including hotels, a boarding house and a flat at the back of a drugs and alcohol treatment centre. It was “totally destabilising” she said.

Third-party assessors could exacerbate the process. “I lost count of the number of so-called experts coming through my house at 25,” one claimant said.

Ms Bourova said insurers should go beyond simply giving claims handlers more training. “You also need enough people to be employed in order to provide a continuity of care approach.

“Dealing with the same person, who has knowledge of the claim and is able to give updates on the insurer’s decisions, has a huge impact for people, even when the outcome is not entirely what they would have wanted. It minimises distress,” she said.