Are insurers being penny wise, pound ($) foolish?

After returning from a business trip to the UK and France in late March, I have been, first, in self isolation for two weeks, and then madly working from home trying to keep on top of the inordinate number of questions from Insured’s, insurance brokers, insurers, and loss adjusters, thrown at me as well as my normal workload.

I only ventured out yesterday simply to walk to the end of the street and back, but wish I had not as many of my neighbours bailed me up to complain about their insurance company and the way their hailstorm claim was going no where. I thought I was going to get tarred and feathered. I took a few photos as I walked back with the tail between my legs. These I have included.

I had helped one neighbour before I went to the UK, and that claim with Budget Direct was settled fairly and to the neighbour’s satisfaction.

Virtually every house in the street suffered major roof damage. From my reckoning, three have been settled, including my own, although I am awaiting payment. However, the method of repair and the cost have been agreed and the work has been done.

This one was hard to photograph, but every level has tarps on it. The rest are not waiting for trades but unhappy with the proposed scope of works, and the ongoing water damage that is happening. Two homes are now without power due to water getting into the wiring and causing either flickering of lights or circuit breakers to trip.

We have had a very wet winter this year and all those not fixed are reporting more damage inside, many with mould issues. Customer satisfaction is terrible to the point I wish no one knew that I worked in insurance.

Repairs are just about to start on this one.

A couple of streets over, another home caught fire with the cause being put down by the fire brigade as storm fire. When questioned what this is, they replied it is where water gets in due to inadequate make safe. That home owner has been instructed to get a quote from the same builder that made the mistake, which has got their blood boiling. Clearly the claims team are not putting themselves in the shoes of the Insured, the last person I would allow to repair/rebuild my home is the company that caused the damage.

We live in a suburb where the homes range from 125 through to 5 years old, with the majority built in the 1920’s and 1930’s. The roofs are typically of terracotta tile and are covered in lichen, which gives them a very aged look, but until the storm were water tight and would have gone on for years with normal regular maintenance.

The main issue is that building consultants are saying that the roof was old and therefore a lot of the damage is preexisting or compounded by the age of the roof. The homes are all insured on a reinstatement and replacement basis, that is new for old basis. The premiums have been rated on this basis.

The neighbours are now having multiple contractors come and quote the work and, in one case, they are up to 14 different visits, make safe, building consultants, tilers, etc., and nothing is moving. As one neighbour said: “I thought loss adjusters were supposed to be working to mitigate losses and further damage. All that is happening is that our loss and disruption is getting worse and if we have to move out due to mould and/or because we have no electricity, it will only get worse.”

Storm claims should be simple. We have been handling them for decades as an industry. There does appear to be a number of consultants who do not understand the policy coverage and think their job is to cut the guts out of claims.

The decision to make claims a financial service is well and truly justified. Getting poor claims service is equally damaging as getting the wrong advice on purchasing insurance, in the first place.

In a suburb of professionals giving low-ball offers and suggesting their preexisting damage was present, when there was none, is not going to work and the ongoing costs of these claims are blowing out unnecessarily, with most having already decided to change insurers on renewal. Who wins from this? Certainly not brand insurance.

I decided not to walk to the other end of the street for a few days yet. What I did say to them all is that they needed to go to www.claimscomparison.com and have their say. I also explained the dispute resolution process open to them and suggested that they engage their own building consultant if they had not already done so. As much as I cannot afford to get involved in this mess, what does a good neighbour do!