The Insurance " Industry " !

When it comes to complaints about short changing payouts and settling claims in the insurance industry the stories are legion.  There is a serious shortfall between the glossy promises the brochures offer and the reality of lodging a claim and having it assessed and paid out in a time of need.

It is well over a year since what was termed a " Tornado " struck the Sydney suburb of Kurnell, unroofing houses and generally leaving a track of damage.  Individual residents had their homes insured with many different insurance companies and consequently some homes have been efficiently repaired, while others are covered with tarpaulins and still fighting their insurers to even
get work started.

The insurance industry is the master of delay - and it is all about their deep pockets when it comes to litigation.  In most cases they tend to wear you down with numerous reasons why your claim will be denied and the sure knowledge that if you resort to the courts they will spare no expense in hiring a brilliant legal team to present their case.   There is the prospect of a losing claimant being bankrupted by costs.

House and contents insurance is usually at the lower end of the complaints scale.  Personal injury and loss of earnings insurance is a minefield for the unwary.   There are miles of very fine print attached to each policy and the interpretation of exactly what that all means is often left to functionaries who are not medical people.

The insurance industry is really a form of gambling.  The industry knows that statistically events only happen to a small section of the community and they make a profit when the weather and other events insured against have a year of happenings below the odds.   They usually spread the risk over many cities and a very wide area to avoid the financial hit that struck Canberra a few years ago when a bushfire roared into the city and destroyed homes in many suburbs.

At the moment a parliamentary enquiry is examining the life insurance industry and finding serious misgivings.  It has labelled some policies as " junk " which bestows little coverage to their policy holders, and alarmingly this shortfall is being sheeted home to some of the biggest names in the industry.

Once again, The mighty Commonwealth bank is coming in for censure.  Its Cominsure insurance arm is taking flack for the mishandling of claims and there has been comment that avoiding payouts of legitimate claims is widespread.  An earlier enquiry found mishandling of financial advice resulting in customers going to it for help with investing for their retirement losing money and being forced to remain in the workforce.   Millions were paid out in compensation.

Hopefully, the parliamentarians will take steps to clean up this industry.   What is obviously needed is an Ombudsman - with teeth.   The Ombudsman's office would need staff trained in insurance law to make a decision on matters referred to it - and their decision would be binding.  Honest and legitimate insurance companies would have nothing to fear from such an arrangement !