7 May 2020
Insurance & Financial Services Ombudsman (IFSO) Karen Stevens says speak to your insurer or financial service provider before making changes to your insurance, loans or investments. The IFSO Scheme also welcomes enquiries or complaints to its free and independent service.
“The IFSO Scheme has received a steady number of Covid-19 related enquiries since March,” says Karen. “Initially the enquiries all related to travel insurance, with a large number of people cancelling or postponing trips. The first thing we say to consumers in all circumstances is to make sure you understand your options so you can make informed choices. Back in early March, that meant contacting your airline or your travel agent, and contacting your insurer so you understand fully what your options are. Since then of course the borders have closed and we’ve been in lockdown. Enquiries to the IFSO Scheme have begun to reflect the consequences of financial hardship and stress - including questions about insurance premiums and loan repayment deferrals, KiwiSaver hardship applications, and redundancy cover.”
“This is undoubtedly a stressful time for many people, and during times of stress, decisions can be made based on panic. That’s not good for consumers. We strongly recommend taking some time to talk through any decision with your insurer or provider. If you are facing financial hardship, you are not alone. Make sure you ask about your options, and the extra assistance available.”
Karen says supporting customers is top of mind in the insurance and financial services sector. “There are a range of proactive measures in place to support customers experiencing financial hardship or other vulnerabilities. Examples include making changes to insurance policies to provide payment relief or premium deferrals, credit contracts and loans are being restructured or repayments deferred. Extra support is in place, and customers are also being directed towards assistance from government, budget advisory services and other support agencies.”
Finding out about the support available is important, together with understanding the consequences of decisions to cancel or change financial products. “For example, there are long-term consequences of having no insurance or retirement savings, loan repayment deferrals do not wipe the loan or the interest, and KiwiSaver hardship applications are considered a last resort. Before you make these decisions, ask about the extra help, support and options available.”
The Insurance & Financial Services Ombudsman Scheme resolves complaints about insurance and financial services. Our service is free and independent.