Insurance delays frustrating customers
The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) is currently getting a high number of enquiries about delays in insurance claims after the Auckland floods and Cyclone Gabrielle.
The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) is currently getting a high number of enquiries about delays in insurance claims after the Auckland floods and Cyclone Gabrielle.
35% of all enquiries that the IFSO Scheme has received in the past month have been about delays, up from an average of 9% in 2022. Insurance delays can be very frustrating, particularly for those still waiting to hear about claims lodged prior to the disasters. For people whose houses have been made uninhabitable or who have had major damage to their vehicle or contents, delays can be immensely stressful and upsetting. Complex cases which require technical experts can take an especially long time to resolve.
Similarly, there are delays for customers who already had claims with their insurers, unrelated to the flooding or the cyclone, who are now being impacted by the immense volume of work for insurers generated by those claims. The IFSO Scheme understands that delays will affect all customers and insurers will prioritise claims. That may mean an unrelated claim cannot be dealt with as quickly as it usually would be, due to the pressure of the huge number of flooding and cyclone claims received.
While there is an allowance in the Fair Insurance Code for delays due to catastrophes or disasters, there are a few things that people can still expect from their insurers. Insurers have a responsibility to update customers every 20 business days, or at another agreed time interval, until their claim is resolved. And if there are vulnerable circumstances that need to be considered, insurers should be identifying and responding to customers on this basis.
Some insurers have now put different teams in place to deal with cyclone-related claims and general claims, to allow faster processing. The government has also set up a service providing homeowners with free and independent insurance-related advice, including help with making claims.
The IFSO Scheme recommends that customers experiencing delays keep communicating with their insurer. However, to avoid very busy phone lines, customers should contact them online or via email. They should also inform their insurer if they have vulnerable circumstances that need to be considered. If customers are not satisfied with the response they get, they can get in touch with the IFSO Scheme to make a complaint.
The IFSO Scheme provides a free service to consumers who have complaints about their insurers – call 0800 888 202 or visit the website for more information about what to do after a natural disaster.