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Impact of COVID

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How insurers are helping their customers

The Insurance Council of Australia (ICA) continues to work with its member companies, governments and regulators to ensure insurers can continue to provide both support and service to customers impacted by the COVID-19 pandemic.

Policyholders should contact their insurer if they are experiencing financial hardship to discuss options available for their individual situation.

Most insurance business operations and urgent services remain available during sporadic location shutdowns. However, these sporadic shutdowns may lead to delays and interruptions to some insurance services.

Insurers expect emergency repairs will be available during shutdowns to make a building safe for a customer and for motor vehicle claims and repairs.

One of the adverse impacts of  lockdowns and state border closures are delays to insurers’ ability to repair, replace or rebuild damaged homes and other assets.  Covid restrictions and border closures are causing significant challenges for insurers involved in rebuilding and repairing disaster-affected communities, leading to uncertainty and setbacks for families trying to get their lives back to normal.

Insurers are seeking an exemption to border restrictions and local lockdowns that will enable them to move claims assessors, disaster recovery specialists, builders and tradespeople in a Covid-safe way between and within states and territories to undertake essential repairs and rebuilds. 

We appreciate the need for restrictions to mitigate health risks, however these must be balanced against the needs of those requiring critical and urgent repairs to their properties that will enable them to pick up their lives and move on. 

The Insurance Council has written to state and territory leaders and the Prime Minister calling for a nationally consistent approach to this issue.

Employers who ask employees to work from home, or approve an employee’s request to work from home, have the same workplace health and safety obligations as those who are working in their normal workplace. Employers should ensure staff working from home have a safe work environment.

Household insurance policies do not usually cover working from home. However, with many Australians now working from home, some insurers are taking a flexible approach. Insurers expect anyone working from home will maintain a safe working environment in line with normal workplace health and safety obligations.

Insurance policies that cover holiday homes may require that the property is not left unoccupied for lengthy periods. The maximum time a property may be left unused will differ depending on the insurer. If holiday homeowners cannot visit or use their properties for an extended period due to COVID-19 shutdowns or travel bans, policyholders should contact their insurer to discuss their individual circumstances.

Car insurance is bought to cover a variety of risks for a full year. Most risks remain unchanged during the COVID-19 pandemic.

Comprehensive car insurance can cover you for theft or damage to your car while it’s parked on the street, your driveway or garage, such as theft or vandalism, or damage caused by severe weather. It also covers you for damage to the car, or damage you may cause, while driving. If you have finance on your car, you are usually required to maintain comprehensive car insurance.

Compulsory Third Party (CTP) personal injury schemes, which are a requirement of registering a vehicle, are regulated by each state and territory. 

If you can’t work because of sickness, injury, disease, employment termination, or death, Consumer Credit Insurance (CCI) can help cover credit card, personal, motor vehicle or home loan repayments depending on the level of cover purchased.

Check your credit card, personal, motor vehicle or home loan documentation for CCI details specific to you, or call your bank or lender, who will have details of any related insurance arranged for you. Your bank or lender will also give you contact details for your CCI insurer if you have a policy.

Some consumer credit policies have exclusions relating to pandemics, but insurers are assessing claims on an individual basis.

Credit Card Insurance, which is a type of consumer credit insurance, sometimes known as balance protection insurance, may pay out the outstanding balance on a credit card (subject to any limits in the policy) or it may make monthly payments to a credit card issuer if the policyholder’s income is affected by unforeseen events.

Call your bank or lender for further assistance. 

Landlord insurance protects the investment that a landlord has made in a rental property. Cover can be purchased for the building, contents or rental income, or any combination of these. Cover for loss of rent is not always included in a landlord policy and may be added as required.

Many landlords are investors who have invested in property to supplement their incomes or support self-managed super funds. Landlords who are borrowers have obligations to their lender, with payments typically met through the collection of rent on the mortgaged property.

Landlord insurance policies are available however some insurers are offering the policy with an adjustment to the Tenant Default component, read the Product Disclosure Statement (PDS) for further detail.

Most travel insurance policies have exclusions for outbreaks of infectious diseases, pandemics, epidemics and/or known events including cancellation costs arising from government travel bans.

Coronavirus became a known event for most travel insurers between January 20 and January 31, 2020. Insurers who adopted known event status for COVID-19 have advice for policyholders on their websites.

Domestic and international travel insurance is available. Some travel insurers are now offering policies that provide cover for some COVID-19 related events including medical expenses where a policy holder contracts COVID-19, their cancellation and additional accommodation costs. 

The Federal Government currently has a Do Not Travel advisory for all countries except for New Zealand.

A travel ‘bubble’ was open between Australia and NZ where travellers could travel from Australia to New Zealand without needing to quarantine on arrival. However, this was put on hold in July. 

To find the appropriate travel insurance for your trip, research the available policies. Read the product wording carefully and check all conditions, inclusions, and exclusions.

Many insurers that offer policies aimed at small to medium enterprises (SMEs) have introduced a range of measures to assist business customers during COVID-19.

If you need assistance contact your insurer or insurance broker to ask how you can be helped.

Click here for an updated summary of the insurance industry’s current efforts to seek clarity on the application of business interruption insurance to claims related to COVID-19.

Insurers pay about 95.7% of claims – that’s more than $152.3 million in a typical working day. However, claims are sometimes denied or not fully paid. Common reasons insurers may deny claims include:

  • Insurance policies contain a list of exclusions outlining specific situations, circumstances or events the insurer will not cover when a claim is lodged.
  • The customer may not have met conditions outlined in the policy.
  • Usually, if the policy has not been renewed, paid for or has been cancelled, the customer will not be able to make a claim.
  • The customer is obliged to tell the insurer about anything that might affect the risk when a policy is bought or renewed. Failure to disclose may affect the ability to claim on the policy.

If the policyholder is unhappy with their insurance company’s decision on a claim, they may ask that their case be reviewed.

All insurance companies are required to have an internal dispute resolution system, and are also required to be a member of an external dispute resolution scheme.

If, after an internal review, the customer is still unhappy with the insurer’s decision they can take their claim to the Australian Financial Complaints Authority (AFCA) https://www.afca.org.au/

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