Go to content

Call for changes to insurance claims after natural disasters

24 Sep 2018

Insurance claims after natural disasters have come under scrutiny at the Royal Commission after evidence from a couple who lost their house in floods in the Hunter Valley in 2015.

Bernadette Heald told the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry that she was still living in temporary accommodation after floods at Lochinvar, near Maitland in April 2015.

She described how her insurer, Suncorp, started by offering her a settlement of nearly $31,000 to repair her house. After taking advice from Legal Aid NSW and referring the matter to the Financial Ombudsman Service, she eventually received settlement of over $730,000 for a complete knock down and rebuild of her house.

“I decided to give evidence to warn others not to take the first offer from an insurance company after a natural disaster,” she said.

“This has been a very stressful and frustrating experience for me and my whole family.

“I dreaded every call and interaction that I had with Suncorp as it was a constant battle over years to obtain what we were
entitled to.

“I was made to feel that I was doing something wrong, even though we were claiming something that we were entitled to, and had been paying for, for years.”

Legal Aid NSW CEO Brendan Thomas said it was not uncommon for insurance companies to place unreasonable demands on those who had often lost everything in a natural disaster, such as a flood or a bushfire.

“One insurance company demanded that a child make a list of all their toys lost, and householders being asked for a list of all their contents before a payout is made,” he said.

“Insurance companies need to be held to account for their behaviour after a disaster, and need to implement more transparent processes.”

Legal Aid has provided specialist advice to victims of natural disasters since since 2008.