Vulnerability and Financial Hardship in Insurance

Vulnerability and financial hardship in Insurance

Vulnerability and financial hardship are complex issues

The insurance industry is committed to improving customer outcomes by addressing the complex social issues faced by customers experiencing vulnerability and financial hardship when dealing with insurance. 

The general insurance industry understands the essential role it plays in the community and the economy and its responsibility to treat customers with respect and compassion whilst recognising the diverse and varying needs of individuals experiencing vulnerability. 

New Code strengthens support for those experiencing vulnerability and financial hardship

The new Code of Practice reflects this commitment by including a new part dedicated to supporting customers experiencing vulnerability. Further enhancements have been made to financial hardship provisions, including a requirement for insurers to have information on their websites about the types of support options that may be available. The new Code also includes a requirement for insurers to have a policy to support people affected by family violence and new provisions about mental health. 

What is vulnerability in the context of insurance?

The General Insurance Code of Practice recognises that a person’s vulnerability may be due to range of factors, for example: 

  • age; 
  • disability; 
  • mental health conditions; 
  • family violence; 
  • language barriers; and 
  • cultural backgrounds.

What is financial hardship?

Financial hardship means you’re having difficulty meeting your financial obligations to your insurer. This could occur due to many reasons, such as: 

  • you may have lost your job, or 
  • you’re suffering from an illness. 

What to do if you’re experiencing financial hardship?

  • Contact your insurer as soon as possible for help and options that may be available to you.
  • The General Insurance Code of Practice sets out how your insurer may be able to help you.

Need urgent financial assistance?

If you are in urgent need of the benefits you’re entitled to under your insurance policy – for instance, your wallet is stolen whilst overseas – you should contact your insurer and let them know what has happened. 

If your insurer is satisfied that you are in urgent financial need, they will either fast-track your claim, and/or make an advance payment to you within five business days.

Missing a policy instalment payment

If you pay an insurance policy in monthly instalments and you miss a payment and it remains unpaid for more than a month, your insurer may cancel your policy. It is best to contact your insurer as soon as possible. 

Can’t afford the excess?

If you make an insurance claim and due to financial hardship you can’t afford to pay your excess, let your insurer know as soon as possible so that they can discuss options with you.

Owing money to insurers 

You can owe a debt to an insurer when you are not their customer – for example, if you cause a car accident and you don’t have insurance, the insurer of the other car can seek payment for the damage from you. If you’re experiencing financial hardship, you can work with the insurer to come up with a repayment arrangement that is affordable for you. This could involve extending the period of repayment and reducing the amount of each payment and/or postponing payments for an agreed period.

Impact of COVID for those experiencing vulnerability and financial hardship

Due to the unparalleled impact of COVID-19 to Australians, insurers fast-tracked their support for customers experiencing vulnerability, including financial hardship and committed to take extra care with their customers, including providing flexible options. Customer-facing staff should now trained to identify those customers who may need extra support.

How can we help?

Insurers are committed to improving customer outcomes by addressing the complex social issues faced by customers experiencing vulnerability and financial hardship. General insurance plays an important role in the economy, protecting individuals and businesses from the financial risk of the unexpected happening.

As Qualified Professional Insurance Brokers, we provide advice and services to assist you with your insurance needs. Contact us today to see if we can help you.

 

Published On: February 21st, 2024Categories: Reg Leis Insurance Services

Does your business have the right cover?

Starting a small business in Australia requires careful planning and adherence to legal requirements. For any business insurance needs, speak first to a qualified practicing insurance broker to understand the products that are right for you and your business. Our experts will work with you to ensure your business has the right cover, should the unexpected happen.