If you feel you were unfairly denied a car insurance claim, there are several avenues you can explore to rectify the situation – everything from the insurer’s internal dispute resolution process (IDR), to external services of the Financial Ombudsman Service (FOS).
1. If you ever find yourself in this circumstance, you will be provided with correspondence by your Insurer explaining the reason why you claim is not being paid.
2. The Insurance Councils General Insurance Code of Practice is quite clear regarding the obligations of insurers when they deny a claim. The insurer is required to:
- give you reasons for their decision in writing;
- inform you of your rights to ask for the information about you that the insurer relied on in assessing your claim, and supply the information within ten business days if you request it …
- inform you of your right to ask for copies of any Service Suppliers’ or External Experts’ reports that your insurer relied on in assessing your claim, and supply the reports within ten business days if you request them … ; and
- provide details of their complaints process.
Source: Insurance Council of Australia
If you are satisfied with the insurer decision, no further action is required, however if you have further concerns, continue on.
3. Once you have all the information they used to arrive at their conclusion, double check everything to ensure that no errors or misrepresentations have been made. Collect all the information you can, such as:
- pictures taken at the scene,
- insurance and assessment reports, and
- police reports.
Then, read through and cross reference these findings with your product disclosure statement (PDS), as it will detail the extent of your insurance policy’s coverage. If you have trouble finding it on your insurer’s website, ring them up and ask where you can find it, or ask them to send it to you via email/direct mail.
4. If you’re still sure that something is amiss from your insurer, you should complain in writing to your insurer’s internal dispute resolution department. The IDR department is an independent function within the insurer who undertakes a separate and complete independent review of the claim.
At this point, you should have a good idea as to why your claim was denied. If you’re still convinced your claim has been dismissed unfairly, you now have all the information you need to escalate your dispute even further. Make sure you attempt step 5 before moving on to 5, as you may be referred back to your insurer’s IDR if you haven’t disputed your claim there first.
5. Seek external advice from the Financial Ombudsman Service (FOS) and make a formal dispute with them. The FOS will then communicate between you and the insurance company in an attempt to either settle the matter or make a decision. The FOS is a free, independent, organisation – and all decisions they make are binding on the insurer.
6. If your dispute has still not been resolved, several options are still available to you, such as:
- Small claims tribunals (differs state to state)
If you pursue these actions, you should ensure you have first attempted all of the above steps, and exhaustively sought professional advice about the validity of your dispute. These processes will incur costs payable by you – the insured.