Financial counselling sector
Submission to the inquiry into insurers’ responses to 2022 major ood claims
Inquiry into insurers’ responses to 2022 major floods claims
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Table of Contents
About us .............................................................................................................................................. 2
The Experiences of Policyholders Before, During, and Aer Making Claims ...................................... 3
Timeframes for Resolving Claims ........................................................................................................ 4
Obstacles to Resolving Claims ............................................................................................................. 5
Insurer Communicaon with Policyholders ........................................................................................ 6
Aordability of Insurance Coverage to Policyholders ......................................................................... 7
Claimants’ Experiences of Internal Dispute Resoluon (IDR) Processes ............................................ 8
Recommendaons .............................................................................................................................. 9
Appendix 1 – Qld and NSW nancial counselling ood data as of 30 September 2023 ................... 11
Appendix 2 – Mental health impact of oods................................................................................... 15
Appendix 3 – case studies from SEQ and northern NSW oods of February and March 2022 ........ 19
Appendix 4 – case studies from Victorian, NSW and Tasmanianoods of October 2022 ................ 30
Appendix 5 – case studies from central west NSW oods of November and December 2022 ........ 40
Inquiry into insurers’ responses to 2022 major floods claims
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About us
The nancial counselling sector in Australia plays a pivotal role in supporng individuals and
communies navigang nancial crises, including those arising from natural disasters like
the 2022 major oods.
These professionals provide essenal guidance, advocacy, and support to individuals
grappling with insurance-related issues, housing concerns, debt, and overall nancial
instability. They help policyholders in understanding their rights and opons when dealing
with insurers, assist in pursuing claims, and oer crical insights into potenal nancial
support programs and grants.
The nancial counselling sector is instrumental in helping policyholders nd a path to
recovery and regain nancial stability during the arduous process of post-disaster insurance
claims. Their experse and commitment to serving the community are indispensable in the
context of insurance-related challenges arising from natural disasters.
Financial counselling agencies in Queensland (Qld) and New South Wales (NSW) received
funding from the Department of Social Services (DSS) in 2022 to provide recovery services,
rstly in the wake of the south-east Qld and northern NSW oods of February and March
2022, then following the central-west NSW oods of November and December 2022.
Financial counselling agencies in Victoria received funding from Consumer Aairs Victoria
and the Victorian State Department of Jobs, Skills, Industries and Regions to provide
recovery services following the October 2022 oods.
Financial Counselling Australia has been working closely with agencies in Qld and NSW to
coordinate the recovery eort. This coordinaon role has involved the delivery of training to
nancial counsellors (see the photos on the front page), the monthly collecon and
aggregaon of data for submission to DSS, and systemic advocacy across banking, insurance
and the two Resilient Homes programs. Since the sector’s recovery eorts began in Qld and
NSW, nancial counsellors have spoken with more than 7,800 people about their service,
assisted more than 1,200 ood-aected community members, and completed more than
5,700 casework sessions. Please refer to Appendix 1 for the latest data as of September 30,
2023.
This report is submied on behalf of Financial Counselling Australia, Financial Counsellors
Associaon of Qld, Financial Counsellors Associaon of NSW, Financial Counselling Victoria,
and Financial Counsellors Associaon of Tasmania. We wish to thank the nancial
counsellors who have taken the me out of their busy schedules to contribute to this report
by subming case studies and parcipang as part of a working group which has helped to
shape and inform this report.
Inquiry into insurers’ responses to 2022 major floods claims
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The Experiences of Policyholders Before, During, and Aer Making Claims
The policyholders we worked with shared experiences that underscore the profound impact
of the 2022 major oods. It is important to recognise that before making claims, many of
these individuals were already grappling with substanal hardships that made them
parcularly vulnerable to the devastaon caused by the oods. Many of them lived in ood-
prone areas, where the harsh reality for some was that insurance coverage, especially ood
insurance, was unaordable or altogether unavailable. For those fortunate enough to have
coverage, their experiences presented disnct but equally formidable challenges.
When the oods occurred, their homes, in which they had invested years of hard work and
savings, were inundated. The oodwaters caused extensive damage to their properes, from
structural issues to the loss of personal belongings and cherished memories. This experience
was not only nancially devastang but also emoonally traumac. Witnessing the
destrucon of one's home and struggling to salvage any remnants can have severe eects on
mental and emoonal wellbeing. Appendix 2 references research from the 2011 Brisbane
oods and the 2017 NSW oods which showed that people whose households or businesses
were inundated or evacuated were at higher risk of experiencing psychological distress and
PTSD.
Aer making claims, these policyholders faced long, emoonally draining bales with
insurers to secure fair selements. The claims process, rather than providing the relief they
so desperately needed, added layers of frustraon, anxiety, and uncertainty. The narraves
from these individuals echo the senments of being lost in a bureaucrac maze, where
seemingly endless paperwork, requests for documentaon and protracted negoaons with
insurers eroded their resilience and deepened their trauma.
A compelling illustraon of the "before, during, and aer" narrave is exemplied by Barry
and Liz (case study 17), a couple living in regional NSW. Their remarkable loyalty to the same
insurer spanned an astonishing 43 years, during which they had never iniated a claim. This
loyalty was tested when the central-west NSW oods damaged their home in November
2022. Their rst-ever claim encounter has been marred by relentless obstacles and
resistance. Despite the relavely modest nature of their claim, securing a cash selement for
the ood-induced damages has become an arduous bale, casng a shadow on their long-
held trust in their insurer.
The enduring impact of these experiences is evident in the toll it has taken on the mental
and nancial wellbeing of our clients. While they hoped for a lifeline during a me of crisis,
the protracted claims processes le them in limbo, with mounng stress and a sense of
helplessness.
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Timeframes for Resolving Claims
The case studies reveal a distressing paern of delayed claim resoluons, with meframes
ranging from several months to well over a year, and in some instances, claims sll pending
even aer an extended period. Policyholders reported being mired in uncertainty and
enduring persistent anxiety as they navigated this lengthy ordeal. The extreme length of
me to reach a resoluon has caused severe nancial strain, emoonal distress, and
connued disrupon to their lives.
Peta (case study 12), a 57-year-old woman whose investment property was aected by the
Victorian oods in October 2022, reported that her property had sat vacant with no strip-out
completed as of April 2023. An engineer had aended the property in December 2022, but
the report was not received unl April 2023, only to then have the insurer and loss adjuster
reject it. Peta described her property as “sinking in mud” and said that “mould had grown up
to the ceilings”.
Tony (case study 15), a 67-year-old man whose mother’s house was inundated by
oodwaters in October 2022, reported that the essenal stripping and drying of the water-
logged property did not begin unl August 2023. This prolonged inacon resulted in mould
proliferaon, damaging both the property and its contents. This loss of valuable possessions
was parcularly devastang, given the recent passing of Tony's mother.
For clients whose principal place of residence was aected, the extensive delays also
resulted in policyholders being le in unsasfactory living condions. Returning to ood-
damaged homes with structural damage, exposed electrical issues and mould growth,
further deteriorated their quality of life. Mary (case study 3) is a 56-year-old woman from
Qld who is the full-me carer for her ausc adult son. She reached out for nancial
counselling assistance 18 months aer the February 2022 oods as both her, and her son
were connuing to live in their property with a sagging roof, damaged walls, and pervasive
mould.
In situaons where policyholders were not covered for the cost of temporary
accommodaon, prolonged disputes and claims processing mes forced them to extend
their stay in private rentals, incurring addional costs and further exacerbang their nancial
burden. Julie (case study 4), a 55-year-old woman from Qld, could no longer aord her
private rental having already paid thousands of dollars for emergency accommodaon for
her severely disabled adult son. The nancial pressure signicantly impacted the cashow of
her business, and she was le with no choice but to return to her ood-damaged property.
The impacts of prolonged claims processes extend beyond nancial and logiscal concerns.
The severe emoonal distress reported in the case studies reveals the psychological toll that
prolonged claims processes take on policyholders. Catherine (case study 9), a 34-year-old
woman in Victoria, became so depressed from the loss and ongoing delays that she had to
reduce her employment from ve days to two days per week. This resulted in a shorall in
the household budget which leCatherine and her partner Paul unable to service their
debts.
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Obstacles to Resolving Claims
External factors played a substanal role in obstrucng the resoluon of claims. The
disaster-hit regions presented mulple challenges for policyholders. Access to these regions
was impeded by damaged infrastructure, road closures, and the inaccessibility of certain
areas due to ongoing oodwaters. However, it is important to note that obstacles to
resolving claims also arose due to frustrated community members who were verbally
aggressive towards insurance sta. Peta (case study 12) from Victoria experienced a last-
minute cancellaon by her insurer due to this scenario. She was visibly distressed by this
turn of events at the me she sought assistance from a nancial counsellor at a community
insurance forum.
The appropriateness of temporary accommodaon was also a concern. John (case study
13), an 85-year-old man in Victoria, had serious mobility issues which his insurer was aware
of. Nevertheless, he was provided with a stock standard caravan on his property while
building works were carried out. However, due to John’s mobility limitaons, he was not
able to use the toilet inside the caravan. He had no other opon but to use the builder’s
toilet outside. One night while accessing the builder’s toilet, he fell and severely damaged
his ear resulng in dozens of stches.
Inadequate communicaon regarding temporary accommodaon somemes had profound
consequences. Leah (case study 2), a 59-year-old woman from Qld who was experiencing
domesc violence (DV), was given just 24 hours’ noce to vacate the temporary
accommodaon provided by the insurer. This sudden displacement put her in an extremely
vulnerable posion, further intensifying the volality of her situaon.
The broader labour market condions and supply chain disrupons due to the widespread
disaster had a direct impact on claim resoluons. Labour shortages and increased demand
for construcon services resulted in extended waitmes for repairs. However, the acons of
some insurers only exacerbated these problems. Barry and Liz (case study 17) in regional
NSW faced a vexing scenario where their insurer displayed a glaring double standard. Firstly,
the insurer rejected the quotes they obtained from local suppliers because they were not
from their "preferred" vendor list. Then, the insurer-appointed repairer withdrew from the
job sending them back to square one.
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Insurer Communicaon with Policyholders
The lack of mely and responsive communicaon from insurers was a consistent challenge
faced by policyholders. Clients such as Leah (case study 2) from Qld, who was experiencing
DV, had dicules reaching her insurer, oen facing unanswered calls and unreturned
emails. This “ghosng” was made worse when the insurer refused to recognise Leah’s
nancial counsellor as an authorised third-party representave.
When vulnerable policyholders are idened, some insurers allocate claims managers to
assist. This provides policyholders with a central point of contact and avoids them having to
repeat their story every me they call. However, we found this process could also be
managed beer. For example, Julie (case study 4) from Qld found that her claims manager
took leave and did not tell her or organise a replacement. Leah (case study 2) from Qld who
was experiencing DV was never even allocated a claims manager.
The other area of concern was quality of communicaon from insurers. Policyholders
encountered issues such as unhelpful or dismissive atudes and inadequate guidance. John
(case study 13), the 85-year-old man in Victoria described feeling “gaslit” by his insurer. A
nancial counsellor in Qld who is assisng Anita (case study 5), a hearing-impaired First
Naons woman with low levels of literacy, also reported feeling gaslit when trying to deal
with Anita’s insurer. To date, Anita’s nancial counsellor has tried at least eight mes to have
the insurer accept them as an authorised third-party representave and to provide
documents regarding Anita’s policy and claims.
Policyholders expressed dissasfacon with the way insurers managed their expectaons.
Terry (case study 16), a 65-year-old man in regional NSW, was reportedly told by his insurer
just weeks aer the ood that he should accept their oer as he “may never get it again”. In
hindsight, Terry has come to realise that the oer from the insurer was far from sucient to
restore his home. He said he felt coerced into accepng the oer at a me when he was sll
reeling from the life-threatening experience he had endured.
Inadequate communicaon regarding the stripping-out process further aggravated
policyholders' ordeals. A prime example comes from Kylie and Wayne (case study 14), a
semi-rered couple in Victoria. Their insurer removed signicant secons of their home,
including the kitchen, bathroom, laundry, toilets, and wardrobes, without proper
consultaon or consideraon. Shockingly, aer these acons were taken, the insurer denied
their claim. The unnecessary stripping out of salvageable items, which did not warrant
removal, is esmated to incur costs exceeding $50,000.
The language and terminology used in communicaons with policyholders also posed a
considerable barrier. Clients felt they lacked the informaon required to advocate eecvely
for themselves which in turn created a power imbalance. Frank (case study 11), an 81-year-
old man from Victoria, would have received a meagre cash selement if not for the
intervenon of his family and a nancial counsellor. Their dedicated advocacy resulted in an
adjusted selement that was eight mes higher than the inial oer.
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Aordability of Insurance Coverage to Policyholders
The issue of aordability is a central concern for policyholders, parcularly regarding ood
insurance. Many faced the untenable choice between high premiums for ood coverage and
the risk of going without.
In situaons where people could not aord ood insurance, the consequences took our
sector by surprise. Three of the case studies highlight instances where homeowners were
subsequently denied access to the Federal Government’s Home Equity Access Scheme
(HEAS), which could have provided much needed funds for property improvements,
including ood resilience. Without ood insurance, which is a prerequisite for HEAS
eligibility, these individuals were denied an opportunity to access the scheme.
The Home Equity Access Scheme allows Australian homeowners of Age Pension age or older
to take out a low-interest loan from Services Australia by using their home as security. Loan
amounts can be taken as a fortnightly amount, an advance payment of the loan as a lump
sum or a combinaon of both. The loan must be repaid to Services Australia, plus interest
and legal costs in part or full at any me including upon sale of the property.
One example is the case of Brenda (case study 8), a 74-year-old homeowner in the Northern
Rivers, NSW, whose home was damaged during the February 2022 oods. She sought
assistance to repair her home using ood-resilient materials but faced nancial hurdles due
to the unaordability of ood insurance. Despite her desire to forfy her property against
future oods, Brenda's inability to secure insurance coverage prevented her from accessing
the HEAS.
This issue represents a signicant challenge for ood-prone regions and the broader goal of
disaster resilience. The lack of aordable insurance coverage, combined with the
requirement for ood insurance to access schemes like HEAS, creates a cycle where
vulnerable policyholders are le without recourse. Many individuals, especially older
cizens, or those with limited income, are forced to forego the opportunity to safeguard
their properes against the increasing threat of oods.
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Claimants’ Experiences of Internal Dispute Resoluon (IDR) Processes
Delays in IDR were a common issue noted by policyholders. This delay primarily resulted
from insurers' sluggish responses to customer communicaons and complaints,
compounding the distressing aermath of oods.
Another recurring problem was the lack of dedicated case managers, which le
policyholders dissased. Many policyholders expressed frustraon with insurers' frequent
changes of case managers. These abrupt changes disrupt the connuity of communicaon
and prolong delays.
Privacy breaches within the IDR processes were also noted by policyholders. Poor handling
of sensive informaon, especially concerning DV issues, negavely aected policyholders'
trust in the insurer. The violaon of privacy, as observed in the case of Leah (case study 2)
from Qld, who was experiencing DV, put her safety at risk and led to a heightened sense of
distress and insecurity.
Inadequate inial cash selement oers became a source of contenon for several
policyholders. These inial proposals were frequently perceived as inadequate, failing to
cover the actual expenses required for repairs. To seek a more equitable nancial outcome,
policyholders turned to the IDR process.
Julie (case study 4) from Qld resorted to IDR aer receiving an inial cash selement oer of
a mere $18,000. She had taken the iniave to obtain three independent building quotes,
each outlining repair costs of approximately $120,000. These costs encompassed extensive
repairs to her roof, ceiling, walls, ooring, kitchen, stairs, bedrooms, and doors (the damage
to which was directly aributed to the insurer). Following the IDR process, the oer was
increased to $39,000, yet a substanal decit of over $80,000 remains – a burden that will
ulmately shi to the government via the Resilient Homes Fund, should Julie accept the
insurer’s oer.
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Recommendaons
A common theme through all the case studies provided by nancial counsellors was that
change is required not only in the procedural approach to managing claims aer a natural
disaster, but also in the holisc approach to managing these claims. In response to the
experiences shared by policyholders, we oer a set of recommendaons that aim to recfy
the procedural shoralls idened, as well as recommendaons that acknowledge the
innate vulnerability of vicms of natural disasters and their heightened risk of psychological
distress:
1. Accept the Financial Counselling Australia Third Party Authority form
Insurers must respect the wishes of policyholders to be represented by nancial
counsellors. To facilitate this, we are calling for consistent recognion of the Financial
Counselling Australia Third Party Authority form by all insurers in line with the General
Insurance Code of Pracce.
2. Ensure mely strip-outs post-ood
Recognising that prolonged delays in strip-outs can lead to the unnecessary loss of
salvageable items and pose health risks due to mould growth, it is recommended that
insurers priorise swi and coordinated strip-out processes following oods. Timely
strip-outs should be executed in consultaon with policyholders to protect salvageable
contents and reduce addional nancial and emoonal burdens on claimants.
3. Overhaul communicaon and transparency protocols for strip-outs
Insurers should implement robust communicaon protocols when it comes to strip-out
processes. Policyholders must be informed and consulted before any major structural
changes occur in their homes. This entails providing comprehensive explanaons
regarding the necessity of strip-outs, the items to be removed and the implicaons on
the claim. Moreover, insurers should document and photograph the aected areas
before the strip-out, allowing for transparency and clarity. Improved communicaon can
prevent misunderstandings, unnecessary losses, and ensure policyholders are informed
parcipants in the claims process.
4. Enhance general communicaon pracces to reduce delays
Insurers should priorise beer overall communicaon pracces. This entails
maintaining transparency and meliness in their interacons with policyholders. To
prevent or address confusion, insurers must provide clear, proacve, and transparent
communicaons. This includes updang policyholders on the progress and decisions
related to their claims and outlining the next steps in the claims process.
5. Improve complaint handling
Insurers should implement more eecve mechanisms for handling complaints. This
improvement is essenal to ensure fairness in claims resoluon. It involves the
idencaon and robust response to expressions of dissasfacon by policyholders. To
meet this objecve, insurers must adhere to their obligaons in terms of resources and
complaint resoluon. This includes training sta to promptly detect and appropriately
address expressions of dissasfacon as they arise.
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6. Provide psychological rst aid training to all frontline insurance sta
Insurers should priorise the mental and emoonal wellbeing of their policyholders
during the claims process. To achieve this, we recommend insurers provide their
frontline sta with psychological rst aid training. This training equips sta with the
knowledge and skills to oer immediate psychological support to policyholders who may
be experiencing distress due to the traumac events of a natural disaster. By fostering a
more empathec and supporve environment, insurers can help ease the emoonal
burden on their policyholders and contribute to a more posive and construcve claims
experience.
7. Allocate trauma-informed claims managers to vulnerable policyholders
Insurers must pay special aenon to policyholders experiencing vulnerability. It is
imperave that insurers recognise and acknowledge consumers who are navigang
vulnerability due to various factors. Insurers should allocate claims managers who have
undergone specialised trauma-informed care training to these individuals and ensure
they are treated with the utmost consideraon, empathy, and fairness.
8. Remove ood insurance from HEAS eligibility criteria
To address the challenges faced by policyholders who are unable to aord ood
insurance, it is recommended that the eligibility criteria for the Home Equity Access
Scheme (HEAS) be changed. While we sll support the requirement that eligible
applicants hold current building insurance, ood cover is now an addional opon which
for many parts of the country is unaordable or not oered. By expanding eligibility to
include those unable to secure ood insurance, HEAS can serve as a lifeline for
vulnerable policyholders in the aermath of ood events. This modicaon to HEAS
eligibility criteria will contribute to greater nancial resilience for individuals in ood-
prone regions, allowing them to address crical repair and recovery needs without the
burden of unaordable insurance costs.
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Appendix 1 – Qld and NSW nancial counselling ood data as of 30 September 2023
427
7,801
Total community contacts this month
Total community contacts since start
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59
1,205
Total new clients this month
Total new clients since start
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547
5,767
Total casework sessions this month
Total casework sessions since start
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Appendix 2 – Mental health impact of oods
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Appendix 3 – case studies from SEQ and northern NSW oods of February and March
2022
Case study 1: Sarah
Client
background
Sarah* is a 73-year-old woman living on 2.4 hectares in south-east
Queensland. Her property was ooded in February 2022, and while her
home was not aected, the access bridge over a creek leading to her
property was damaged, as well as some fencing.
Presenng
issue(s)
Sarah had ood insurance through Hollard who inially paid out $4,000
for fence repairs.
The claim approval to repair the access bridge had been delayed for over
nine months when Sarah sought help from a nancial counsellor (FC) to
resolve the claim with Hollard.
Casework
summary
Sarah inially made contact in December 2022, by which me the repair
work had been delayed by nine months. The FC advised Sarah of the
Internal Dispute Resoluon (IDR) process available to her, and the
further opon to escalate the maer to AFCA, if necessary.
Sarah, with the help of her daughter, self-advocated to lodge an IDR with
Hollard.
In February 2023, Sarah advised that Hollard claimed the damage to the
bridge was not covered by her policy, but verbally agreed to cover the
cost of the repairs as an “act of goodwill”.
Sarah has been ed up in red tape since receiving this verbal agreement
and the bridge remained unrepaired. The FC advised Sarah to lodge a
complaint with AFCA, which she did with the help of her daughter.
Outcome
In May 2023, the AFCA complaint was seled, with Hollard agreeing to a
selement.
As of October 2023, Sarah is waing on a quote to nalise the claim.
AFCA will be monitoring the case for six months.
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Case study 2: Leah
Client
background
Leah* is a 59-year-old woman living in south-east Queensland and
experiencing domesc violence (DV). Her property was under a contract
of sale when it ooded on February 27, 2022. Although the contracted
owners were happy to connue with the purchase if the house was
cleaned out, the insurer, Hollard failed to clean out the property and the
sale subsequently fell through.
Presenng
issue(s)
Leah rst contacted a nancial counsellor (FC) in November 2022, by
which me she had made mulple internal complaints to Hollard, and
subsequently iniated two complaints to AFCA.
At the me of meeng with the FC the AFCA case was sll open.
Leah sought assistance to nalise the insurance payout.
Casework
summary
During the course of her involvement with Hollard, Leah experienced
extensive delays – Hollard did not respond to her calls or emails, the
Scope of Work (SoW) was not completed by Hollard causing further
delays; and Leah had no dedicated case manager, despite experiencing DV.
Hollard correctly noted on their les that Leah was experiencing DV.
However, they breached her privacy when a domesc violence specialist
worker from Hollard contacted Leah’s perpetrator in error, and advised
they were calling from the Hollard DV department. This forced Leah to
have connued interacons with her perpetrator while the claims maer
was resolved.
In addion to this, Leah’s property was uninhabitable aer the ooding
event, and while Hollard provided temporary accommodaon for Leah, in
January 2023, Leah was given only 24 hours’ noce by Hollard to vacate
the temporary accommodaon. No further accommodaon was provided.
Between December 2022 and July 2023, Hollard oered Leah three
separate, and unacceptable cash selements. The rst in December 2022
was for $193,000, despite the home being insured for $495,000 + 25%
(and no completed SoW). Aer AFCA involvement and mediaon, Hollard
oered a second cash selement in June 2023 for around $250,000. This
was again rejected by Leah, as quotes obtained to repair her home
exceeded $300,000. Hollard oered a third cash selement of
approximately $280,000 in July 2023, but this was again rejected by Leah.
In August 2023 the maer was nally resolved as a result of an AFCA
panel determinaon, and Hollard was ordered to pay a total of around
$310,000 to Leah, which included a cash selement for addional
temporary accommodaon, as well as a non-nancial loss compensaon
component.
The FC advocated on Leah’s behalf with both AFCA and the insurer to
facilitate nalisaon of the claim, culminang in an AFCA panel review to
Leah’s sasfacon.
Inquiry into insurers’ responses to 2022 major floods claims
21
Outcome
The AFCA determinaon was accepted by all pares and the le was
closed on 13 September 2023.
Inquiry into insurers’ responses to 2022 major floods claims
22
Case study 3: Mary
Client
background
Mary* is a 56-year-old woman from south-east Queensland. She has
mulple health concerns, and her only source of income is the Carers
Pension, which she receives for caring for her ausc son (who receives
the Disability Support Pension).
Presenng
issue(s)
Mary rst met with a nancial counsellor (FC) in July 2023 seeking
assistance to resolve her outstanding claims.
Mary’s home was impacted by heavy rain in February 2022, resulng in
damage to her roof as well as excessive mould throughout the home.
Mary was claiming under her car, contents and building insurance and rst
contacted Suncorp in May 2022.
Casework
summary
While Suncorp inially made Mary’s home safe, there have been
connued delays with Mary’s claim and 16 months aer it was rst
lodged, it remained unresolved.
Suncorp oered Mary an inial cash selement of $10,200, which was
rejected by Mary. Mary subsequently lodged an Internal Dispute
Resoluon with Suncorp. Suncorp is claiming pre-exisng condions
existed and Mary was not sased with the result.
Mary’s house has a sagging roof, damaged walls and mould. Suncorp has
been provided with a medical leer describing the eects the state of the
home is having on Mary’s physical and mental health. However, Suncorp
had not agreed to relocate Mary and her son and provide temporary
accommodaon.
The FC referred Mary to the Caxton Legal Centre to assist her in escalang
her complaint to AFCA.
Outcome
The FC was unable to contact Mary for an update.
Inquiry into insurers’ responses to 2022 major floods claims
23
Case study 4: Julie
Client
background
Julie* is 55-year-old woman from south-east Queensland. She owns her
own small business and has a disabled adult son on NDIS.
As a result of the trauma Julie experienced from the ood, combined with
her experience of dealing with her insurer, CGU, she now suers from
signicant mental and physical health issues.
Julie experienced a mental health breakdown, and as a result now suers
from a condion whereby her nervous system shuts down and she
requires a support dog.
At the me of wring, Julie’s adult son had been hospitalised for the
previous 20 weeks in a near-catatonic state, as a direct result of the
family’s experience post-ood. Julie’s son remains in hospital.
Presenng
issue(s)
Julie was referred to a nancial counsellor (FC) by Legal Aid in May 2023,
who had been assisng Julie with her insurance maers.
As a result of the delays in seling her insurance, Julie’s cashow could no
longer sustain both the costs of a private rental property and running her
business.
Julie felt she had no choice but to move back into her ood-damaged
home, despite limited repairs being completed.
Julie sought assistance from the FC to negoate her mortgage with her
lender to help provide some relief to her cashow situaon.
Casework
summary
While Julie was appointed a claims manager by CGU, the claims manager
took leave, and Julie was not advised, nor was a replacement case
manager appointed. Julie also advised that CGU did not return her calls,
leaving her without any meaningful form of communicaon.
Despite Julie’s home being signicantly impacted by the ood, CGU did
not provide Julie and her son with emergency accommodaon, nor did
CGU provide long-term temporary accommodaon. As a result, Julie was
forced to nd private rental accommodaon. However, paying rent plus
the mortgage on her damaged property meant signicant cashow issues
for Julie’s business.
As a result of these cashow issues, Julie felt she had no opon but to
move back into her ood-damaged property in June 2023, which was in a
state of disrepair, as well as having electrical and plumbing issues. At the
me of wring, Julie was sleeping on a maress on the oor of an upstairs
room.
Compounding Julie’s stress, her son remained in hospital aer suering
extreme mental and physical eects from the impact of the ood. The
cost to Julie to fund emergency care/accommodaon for the inial two
weeks for her son was $28,000 (via NDIS). Julie has advised that the
ongoing care/accommodaon costs for her son were $5,500 per week
Inquiry into insurers’ responses to 2022 major floods claims
24
unl her son was oered a hospital bed (this cost was on top of Julie’s
private rental costs).
CGU declined Julie’s claim cing maintenance issues with her roof and
inially oered a cash selement of $18,000 to repair her roof, ooring,
walls, kitchen, doors (broken by Insurer), ceiling, stairs and bedrooms.
Julie had sought three independent building quotes, each detailing costs
of $120,000 for repairs.
CGU rejected the builder’s quotes provided by Julie, stang she was
seeking to ‘improve’ the property and not repair the property.
At the me of wring CGU had oered a new cash selement of $39,000.
Outcome
The Community Resilience and Recovery team is currently working with
Julie and has helped her apply for funding to raise her home via the
Resilient Homes Fund.
As a result of this interacon with the Community Resilience and Recovery
Team, Julie has been provided with a caravan and pod on site to ensure
she has safe accommodaon.
The FC advocated on Julie’s behalf with the mortgagee and nalised an
arrangement she is sased with.
Inquiry into insurers’ responses to 2022 major floods claims
25
Case study 5: Anita
Client
background
Anita* is a First Naons woman with a hearing disability. She was
referred to nancial counselling by her NDIS support worker. During the
rst appointment, the nancial counsellor (FC) learned that Anita has
limited literacy skills and a recent history of being hospitalised for
mental ill health.
Anita owns her own home with a very small mortgage and receives the
Disability Support Pension. She is insured through RACQ.
Presenng
issue(s)
In February 2022, Anita’s house was inundated by ood waters up to her
ankles. The carpets were wet for months, and the house is now full of
mould. The washing machine and air condioning units were also
damaged.
When Anita rst sought assistance from the FC in July 2023, she didn’t
know if there was a claim open, but she could show a small payment
received from the insurer last year. Anita told the FC that she wants to
make an insurance claim for ood damage.
Casework
summary
Anita and the FC called RACQ together. They were given the claim
number relang to the small payment Anita received last year but were
told there was no claim currently open.
The FC emailed a signed Financial Counselling Australia (FCA) Third Party
Authority (TPA) form to RACQ, outlining Anita’s vulnerabilies, and
requesng a copy of the policy and documentaon relang to the
previous claim.
RACQ rejected the FCA TPA and referred the FC to their privacy policy.
The FC made several more aempts to lodge the FCA TPA and quoted
the relevant secons of the General Insurance Code of Pracce but was
sll rejected.
The FC tried to lodge an internal complaint but was told by RACQ this
would not be possible because a company-branded RACQ TPA was not in
place.
The FC requested and received a copy of the RACQ TPA, which the FC
then organised for Anita to sign before emailing it back to RACQ.
RACQ rejected its own TPA because it was sent from the FC’s email
address and not from Anita’s email address. RACQ also said that Anita’s
details were not up to date and stated that she must call from her phone
number (not the FC’s phone number) to verbally open a new claim and
add the FC as an authorised person.
Geng the FC on the member’s policy/claim as an authorised person
took eight separate aempts over the course of two months. The FC has
described feeling gaslit by RACQ during the process. An AFCA complaint
has been lodged for non-nancial loss.
Inquiry into insurers’ responses to 2022 major floods claims
26
Outcome
Anita has now been passed on to RACQ’s Hypercare team for
monitoring.
A new claim is open. RACQ has referred the claim to a construcon
group, and the FC is assisng Anita to arrange a me for an assessor to
come out.
The FC is sll waing for documents requested two months ago. The
AFCA complaint has not been resolved.
Anita has been with RACQ for a very long me and would like to stay
with them, but she has spoken of her anger at the delay in accessing the
support she needs from her FC, and this delay has been signicantly
detrimental to her mental health.
Inquiry into insurers’ responses to 2022 major floods claims
27
Case study 6: Jenny
Client
background
Jenny* is a 68-year-old woman living in the Northern Rivers, NSW and
receiving the Age Pension. Her home had 50 cenmetres of water
through it in February 2022, however the home is built of ood resistant
materials and is in good shape and liveable. This is the rst me the
house has ooded.
Jenny was insured with NRMA but did not have ood cover as the cost
was prohibive. She did not receive an insurance payout as the damage
was deemed to be as a result of ood not stormwater. Jenny did receive
a Back to Home grant of $20,000.
Jenny no longer has home and contents insurance. An inial exercise of
obtaining quotes for re-insurance has proven dicult due to the
property being located in a ood zone. In addion, ood insurance could
prove prohibively expensive if it were oered.
Presenng
issue(s)
Due to rising interest rates, Jenny has been unable to keep up with her
monthly mortgage repayments.
Due to Jenny’s age and employment status, she is unable to access any
equity in her property via tradional means.
Casework
summary
FC determined that the Home Equity Access Scheme (HEAS) was one of
the best opons for Jenny to be able to pay her mortgage and provide
funds for a beer quality of life (e.g., obtain health insurance).
Jenny was wanng to receive a fortnightly payment of $536 through
HEAS, resulng in a Maximum Loan Amount of $48,000 by 24
September 2026. The purpose of these fortnightly payments would be
to (1) assist in meeng current mortgage obligaons and (2) provide
funds to get health insurance and home and contents insurance.
To be eligible for the HEAS, the property oered for security must be
adequately insured. As per para 3.4.5.10 of the Social Security
Guidelines, this includes coverage for standard events such as re, storm
and ood.
Outcome
Jenny has been found ineligible for HEAS because she cannot aord to
obtain ood insurance.
She is experiencing signicant anxiety over her nancial posion and is
suering from ongoing trauma as a result of the 2022 ood events – this
is being exacerbated by the process of geng insurance quotes and the
issues around ood insurance.
An inability to access HEAS limits Jenny’s opons to improve her
nancial posion and increases the reliance on the bank’s hardship
policies.
Inquiry into insurers’ responses to 2022 major floods claims
28
Case study 7: Steve
Client
background
Steve is a 67-year-old man living in the Northern Rivers, NSW and
receiving the Age Pension, topped up by superannuaon. His home was
aected by oods in February 2022.
Steve was insured with NRMA but did not have ood cover as the cost
was prohibive. He did not receive an insurance payout as the damage
was deemed to be as a result of ood not stormwater.
Presenng
issue(s)
Steve was wanng to access funds for the purpose of repairing the
foundaons of his property that were severely damaged in the ood.
As a priority, the slab needs to be reinforced to preserve the integrity of
the home – it has various cracks in it that is causing structural damage to
the upstairs living area. This could cost approx. $10,000 at a minimum
(the Johns Lyng group prepared a Flood Assessment of the property and
quoted necessary repairs at over $200,000).
Steve applied for the Disaster Recovery Grant but was denied as he was
deemed to have too many assets.
Casework
summary
FC determined that the Home Equity Access Scheme (HEAS) was one of
the best opons for Steve to access a lump sum payment of $14,257
which would enable him to fund the most urgent of the necessary
repairs to his property.
In order to be eligible for the HEAS, the property oered for security
must be adequately insured. As per para 3.4.5.10 of the Social Security
Guidelines, this includes coverage for standard events such as re, storm
and ood.
Outcome
Steve has been found ineligible for HEAS because he cannot aord to
obtain ood insurance.
Due to Steve’s age and health status, he is unable to access any equity in
his property via tradional means. If he were to use his remaining
superannuaon to remedy the structure to the extent quoted by the
Johns Lyng group, this will leave Steve without funds to meet any future
cost of living increases or unexpected expenses.
An inability to access HEAS limits the client’s opons to stabilise his
property and prevent further damage.
Inquiry into insurers’ responses to 2022 major floods claims
29
Case study 8: Brenda
Client
background
Brenda is a 74-year-old woman living in the Northern Rivers, NSW and
receiving the Age Pension. Her home was aected by oods in February
2022.
Brenda was insured and did receive an insurance payout, but it was only
for “like for like” replacement. Her home was not deemed eligible for a
buyback or a retrot under the Resilient Homes program.
Brenda esmates it would cost her an addional $30,000 to complete
the rehabilitaon of her home using ood resistant materials. She has
home and contents insurance, but this does not cover ood events. In
addion, ood insurance could prove prohibively expensive if it were
oered.
Presenng
issue(s)
Brenda was struggling to repay her mortgage due to increased interest
rates. She wants to complete the repairs to her home using ood
resistant materials.
Due to Brenda’s age and employment status, she is unable to access any
equity in her property via tradional means.
Casework
summary
The FC determined that the Home Equity Access Scheme (HEAS) was
one of the best opons for Brenda to be able to fund her mortgage
repayments and rehabilitaon of her property.
Brenda was wanng to receive assistance of a lump sum payment of
$10,000 to assist with rebuilding her home AND a fortnightly payment of
$196 to assist in meeng current mortgage obligaons. This would result
in a Maximum Loan Amount of $202,500 by 3 August 2045.
In order to be eligible for the HEAS, the property oered for security
must be adequately insured. As per para 3.4.5.10 of the Social Security
Guidelines, this includes coverage for standard events such as re, storm
and ood.
Outcome
Brenda was deemed ineligible for HEAS because she could not aord
ood insurance.
An inability to access HEAS limits Brenda’s opons to improve her
nancial posion.
Inquiry into insurers’ responses to 2022 major floods claims
30
Appendix 4 – case studies from Victorian, NSW and Tasmanian oods of October 2022
Case study 9: Paul & Catherine
Client
background
Paul* and Catherine* are partners aged 40 and 34 respecvely. They
lived in a riverside, ve-acre property in regional Victoria. They were
forced to vacate their property due to total inundaon by ood water in
October 2022.
Presenng
issue(s)
Catherine had become overwhelmed by their loss and suered
depression. This reduced the number of days she could work from ve
days to two days per week. Consequently, this caused a shortage of cash
in their budget, and they sought nancial counselling assistance to
negoate with their creditors.
Paul works remotely for a professional rm in Melbourne and Sydney.
He found that he had to be around the property all the me for
assessors, tradespeople, etc. This meant he could not take on larger
assignments outside of his town. This impacted his income which
further exacerbated the couple’s nancial problems.
Casework
summary
The nancial counsellor (FC) negoated around the following:
Hollard – tried to expedite nalisaon of the claim, which was painfully
slow and only seled in May 2023
Commonwealth Bank – negoated payment arrangements for;
mortgage (on the inundated property), personal loan and credit card.
Local City Council – negoated extended payment terms for property
rates
Water provider – extended payment terms and Ulity Relief Grant
Electricity provider – Ulity Relief Grant
Outcome
The case was assessed by Hollard as a total loss. The insurer paid
$450,000 for the loss of the property and $100,000 for the loss of
contents.
An unwelcome comment by one of the assessors just prior to selement
was that as the property was a total loss, Hollard may have had to sele
directly with the Commonwealth Bank and bypass Paul and Catherine.
This caused unnecessary stress for the couple as they would not have
had any funds to rebuild their home.
The FC advised Paul and Catherine that the assessor was wrong, and
that Hollard would sele with the Insured and not the bank which
proved to be the case.
The length of me it took for Hollard to assess and nalise the claim was
incredibly exhausng for the couple at a me when they were already
struggling both mentally and nancially.
Inquiry into insurers’ responses to 2022 major floods claims
31
Case study 10: Patrick & Maureen
Client
background
Patrick* and Maureen* are partners aged 72 and 68 respecvely. They
are both rered and live on a rural property in Victoria which suered
ood damage in October 2022.
Presenng
issue(s)
Patrick and Maureen reported feeling “exhausted” when they sought
nancial counselling assistance. They had been trying to deal with their
Insurer, AAMI but were not geng very far.
The couple’s claim was for a large replacement farm shed. AAMI had
declined their claim because they had deemed some of the ood
damage was due to wear and tear.
Casework
summary
Firstly, the FC had to get some clarity around where the couple was up
to in the claims process.
From there the FC was able to assist Patrick and Maureen to negoate
with AAMI for a second assessment to take place. The results of this
second assessment diered from the inial assessment.
Outcome
This maer has now been seled. Patrick and Maureen were not
awarded a replacement shed, however AAMI paid for some remedial
works to the shed and the couple addressed other maintenance issues.
The claim took a very long me to assess which made progress very slow
and le Patrick and Maureen with a lack of clarity. This seemingly never-
ending feeling of uncertainty is what contributed to the couple’s sense
of exhauson.
Inquiry into insurers’ responses to 2022 major floods claims
32
Case study 11: Frank
Client
background
Frank* is an 81-year-old reree who resides in his mortgage free unit in
Victoria. He is a widow with adult children who do not live with him but
provide ongoing support.
Frank has sciaca nerve damage and mild emphysema.
He is in receipt of Centrelink’s age pension at the full rate, he does not
receive any other income.
Presenng
issue(s)
Frank is supported by his adult children to remain in his home. He is
heavily supported by his son Boris* and is engaged with Flood Case
Support.
Frank is a born and bred Rochester resident who had his home ooded
by the October 2022 oods. He chose to remain in his home irrespecve
of the damage caused by the oods as, due to his age he was concerned
he would never return.
Boris had been assisng Frank with his insurance claim following the
oods however was having issues with the insurer – Hollard oering
suitable cash selement for the claim. As a result, a referral was sent
through to our program to review the claim and aid in progressing it.
Casework
summary
The insurer, Hollard had inially oered $24,000.00 to sele both
building and contents. Boris was able to advocate to have this increased
to $124,000.00 aer four months of backward and forwards with them.
Boris was concerned that this may not be sucient to repair the home
for Frank and needed assistance ensuring it was the best outcome
available.
There were no other nancial concerns present during case work.
The nancial counsellor spoke with both Frank and Boris regarding the
claim. Following a review of the documents available was able to assist
by:
- Providing an overview of the Product Disclosure Statement (PDS)
- Explain addional benets available to Frank, including Temporary
Accommodaon Benet
- Explain transfer of risk by taking cash selement and how to migate
this risk
- Explain Hollard Internal Dispute Resoluon process along with
opon of lodging External Complaint via Australian Financial
Complaints Authority (AFCA)
- Draemail to send to Hollard requesng addional 30% towards
building claim (bringing this to $131,000.00), temporary
accommodaon benet cash selement and non-nancial loss.
Inquiry into insurers’ responses to 2022 major floods claims
33
The nancial counsellor had oered to send the dra email to Hollard
on Frank’s behalf however was waing for Boris to provide the signed
authority to do so.
Outcome
Boris took the draft email to Hollard who offered the following to
resolve the dispute:
- Additional 20% on building cash settlement offer totalling
$120,000.00.
- Temporary Accommodation Benefit cash settlement of $43,000.00
- Ex-Gratia, non-financial loss compensation of $5,000.00
- Contents cash settlement of $25,000.00
This brought the total claim outcome from $124,000.00 to $193,000 in a
matter of 48 hours. Both Frank and Boris were pleased with this
outcome as it was likely that Frank would have some funds remaining
after the rebuild.
Frank was surprised and satisfied with the outcome. His son Boris had
called and spoken with the program team leader and asked how they
could give back to the program for the assistance. They had offered to
donate a portion of the non-financial loss compensation to the Agency
to say thank you.
Inquiry into insurers’ responses to 2022 major floods claims
34
Case study 12: Peta
Client
background
Peta* is 57-year-old woman who lives with her partner in his property.
Both their home and her rental property were ooded during the
October 2022 ood event. Peta’s rental property was insured through
ANZ and underwrien by QBE.
Peta works part me.
Presenng
issue(s)
The nancial counsellor approached Peta at an insurance forum where
she was visibly distressed while on the phone to her insurer. QBE
decided to cancel all face-to-face appointments following an incident
the day before where a policyholder had to be removed by security due
to verbal aggression towards their sta.
Peta’s rental property had sat vacant with no strip out completed as of
April 2023. An engineer had aended the property in December 2022,
but the report was only received in April 2023 – the insurer and loss
adjuster indicated that the report was not up to the required standard.
Peta stated the home was sinking in mud and mould had grown up to
the ceilings as no remediaon works or drying had occurred.
Casework
summary
Peta was supported to lodge an AFCA complaint due to the signicant
delays in receiving engineer reports, this also ensured her claim
connued to progress while on the acve holding list for nancial
counselling services.
The nancial counsellor supported Peta to engage a structural
assessment oered by the state government which recommended
demolishing the property.
The nancial counsellor supported Peta to access all reports and
documents from the insurer to support her request for a cash
selement.
The nancial counsellor worked with senior complaints resoluon ocer
to cash sele the claim at $285,000 with addional 20% upli for
conngencies for building.
Writer supported Peta to nalise contents claim at $16,000.
Outcome
The case is now closed, the property is in the process of being
demolished. Peta moved back into her other home with her partner.
Peta expressed a great improvement in her mental wellbeing since
resolving her ANZ claim and moving back home.
Inquiry into insurers’ responses to 2022 major floods claims
35
Case study 13: John
Client
background
John* is an 85-year-old man who lived independently in his home that
was ooded during the October 2022 ood event. John does not have
any family and is isolated within the community and at home.
John suers hearing loss so wears hearing aids and struggles to hear on
the phone or in loud environments. John is of sound mind and is
incredibly intelligent. John suers poor mobility and can be unsteady on
his feet at mes. Following a recent fall, he was transported to hospital
where her was referred to a cardiologist as his heart rate was 40 beats
per minute. John would ordinarily sleep in an electric bed and use an
electric armchair as it was easier for him to get up and down – these
items were destroyed in the oods.
Presenng
issue(s)
John required assistance communicang with RACV to progress his claim
and access appropriate temporary accommodaon. The relaonship had
broken down and John described feeling gaslit and not listened to by
RACV. John had been supported by the local community legal centre
community engagement ocers who had on several occasions raised
concerns about his vulnerabilies – RACV did not oer to take extra care
with his claim at any me.
John was asked to accept cash selement for a caravan on the spot and
felt he was not given an opportunity to think it through. The caravan
purchased was not suitable – John needed to step in and out of the
shower and use the shower head to support himself. He was not able to
use the toilet so needed to use the builder’s toilet outside, this resulted
in him falling at night-me and severely damaging his ear with dozens of
stches.
John had made selecons for his custom kitchen in March however had
not received the nal selecons to sign so it could be ordered. RACV
stated over the next 6 months that he had signed them however were
unable to produce the paperwork and the kitchen was delaying his
rebuild.
Casework
summary
The nancial counsellor assisted John to move into a disability pod at
the local caravan which suited his mobility needs which RACV have
agreed to pay for despite him having received a cash selement for
temporary accommodaon. RACV explained that broadly they oered
caravans because John lives rurally there is no other opon available –
they have not been able to arculate clearly why he was oered to
purchase a caravan when they were aware of his vulnerabilies.
The nancial counsellor has escalated his building claim within RACV
and is now working directly with senior and lead claim handlers and
senior builders. John was able to meet with the nancial counsellor,
RACV and case support to go through his concerns with the rebuild.
Outcome
John is sll living in the caravan park with an expected repair compleon
date of November 2023.
Inquiry into insurers’ responses to 2022 major floods claims
36
Due to delays in the kitchen being ordered, this has meant that John
could have RACV redo many areas in his home that he made concessions
on – thinking it would get him home sooner.
John has stated several mes that he doesn’t have much me le to live
and he just wants to do it at home. John explained he doesn’t feel like
his insurer cares, and he is sll incredibly frustrated at how silly they
have tried to portray him.
The case is sll ongoing, the nancial counsellor intends to discuss
lodging a formal complaint with John against RACV once he has returned
home. John is not able to focus on anything more than progressing the
repairs and geng home.
Inquiry into insurers’ responses to 2022 major floods claims
37
Case study 14: Kylie & Wayne
Client
background
Kylie* and Wayne* are 67 and 72 respecvely. Kylie is semi-rered
working a few hours each week while Wayne is fully rered. They own
their home outright. Wayne is a rered builder and the main carer for
his 92-year-old mother who lived in the same street.
Presenng
issue(s)
Kylie and Wayne’s home was impacted by the October 2022 ood event
and held insurance with Budget Direct however their policy did not
cover them for ood. They accessed nancial counselling services
because they were concerned that Budget Direct had stripped their
home fully and disposed of salvageable items without conrming their
claim had been approved. Salvageable items included enre kitchen and
bathroom, laundry, toilets, and wardrobes – quotes for replacement
came in at over $50,000.
A hydrologist aended the property in November 2022, but the report
was not received unl March 2023.
The builder’s engaged by Budget Direct, JP Flynn, had Kylie and Wayne
sign a waiver form to commence the strip out of their home however
this did not detail disposal of salvageable items.
Casework
summary
The nancial counsellor sought legal advice regarding the waiver form to
understand their rights regarding the disposal of salvageable goods.
Once the hydrologist report was received and claim subsequently
declined, they were supported to apply for reestablishment grants.
The nancial counsellor lodged an internal dispute resoluon (IDR)
complaint regarding the disposal of salvageable items without their
explicit consent.
Outcome
Budget Direct responded to the IDR and declined any liability for the
disposal of salvageable goods falling back on the policy inclusions and
exclusions. Given the claim was declined it was dicult to understand
how they could rely on this.
The nancial counsellor referred the maer to a legal service provider
who agreed to take the case on. To date they are preparing an AFCA
complaint to argue the decision to decline the claim.
Inquiry into insurers’ responses to 2022 major floods claims
38
Case study 15: Tony, Kevin & Cynthia
Client
background
Tony* is a 67-year-old man who was living with his 97-year-old mother
Cynthia* (as her primary carer) and his 65-year-old brother Kevin* at the
me of the oods.
Tony had moved into Cynthia’s home to be her full-me carer and
rented his property out. Kevin suers from mental health issues and is
substance aected.
Tony and Kevin are in receipt of Centrelink benets. Approximately 1
month aer the October 2022 Flood Cynthia passed away with Tony
being the executor of her Estate.
Kevin’s rental property was insured but did not have ood cover.
Cynthia’s property was insured with CommInsure/Hollard.
Presenng
issue(s)
Cynthia has a reverse mortgage on the home of approximately $600,000
accruing interest at approximately $5,000 per month. Tony was
concerned about what may happen now Cynthia has passed away and
that any equity in the property/Estate was being consumed by interest
due to the delays of Hollard.
The insurance claim on Cynthia’s home was accepted in February 2023
however the property had not been stripped out or dried – this did not
occur unl August 2023 and is sll not completed fully. Tony was
concerned that the mould in the home was spreading to the second
story which had not been impacted by ood waters during the event.
Tony explained that he was staying in a family friends holiday home and
his brother Kevin was being supported by someone else for
accommodaon.
Casework
summary
The nancial counsellor lodged an AFCA complaint to address the
temporary accommodaon benet and delays in remediang the
mould/strip out of the property.
Tony had signed authority for Hollard as the executor, they contacted
him and requested that he sign a Hollard specic authority form rather
than accepng the Financial Counselling Australia Third Party Authority
form. From the nancial counsellor emailing the authority to them and
them contacng Tony to sign a dierent form, 3 weeks had lapsed with
no updates or movement on the claim.
AFCA contacted the nancial counsellor and explained Hollard had
resolved the complaint despite them not having contacted the nancial
counsellor to discuss at all. Hollard indicated that Tony had been dicult
to contact which had caused delays with the claim however upon
reviewing Hollard case notes, it was established that Tony had missed
two phone calls from them – one the week Cynthia had passed and
another which the call was returned by Tony within 3 business days.
The nancial counsellor was able to assist Tony in compleng a contents
list which saw the contents paid as a total loss plus a 25% gap.
Inquiry into insurers’ responses to 2022 major floods claims
39
The nancial counsellor was able to assist Tony to access temporary
accommodaon benet under ‘staying with friends/family’ at $600.00
per week for 12 months. However, Kevin was unable to nd suitable
accommodaon and unable to stay at the same residence at Tony.
Hollard had declined cash seling a rental property for Kevin without a
signed lease agreement, but Kevin wasn’t able to secure the rental
property due to his low income. Hollard also declined to purchase a
caravan for Kevin to live in at Tony’s property. This le the Victorian
Government connuing to fund his accommodaon for approximately
10 months.
The nancial counsellor was able to negoate 12 months interest free
on the reverse mortgage which totalled approximately $55,000.
Outcome
The 12 months temporary accommodaon has expired. Tony gave the
tenants a noce to vacate his home and moved back in with Kevin, so he
has somewhere to live. We are sll negoang with Hollard to cover
addional temporary accommodaon given the loss of rent Tony now
experiences and that repairs to the home have not commenced.
Hollard provided $2,500 ex-graa payment following the AFCA
complaint.
To date, the property has been sanised, stripped and asbestos removed
except for one room, this has been included in the scope of works.
A scope of works was only produced in September 2023 to the nancial
counsellor however it has not been signed. A recent visit to the property
by the builder and Tony has indicated that an engineer needs to aend
the property due to structural issues with the granny at.
Tony is devastated that the delays have resulted in almost all contents
being disposed of due to mould growth. It is further complicated
because Cynthia has passed, and his family have now lost those precious
items.
Tony connues to experience frustraon with how the claim has and is
being handled – there appears to be no true claims manager which one
would expect given the vulnerabilies and complexies of the claim.
Inquiry into insurers’ responses to 2022 major floods claims
40
Appendix 5 – case studies from central west NSW oods of November and December
2022
Case study 16: Terry
Client
background
Terry* is a 65-year-old man living next to a creek in regional NSW. His
home was totally inundated with oodwater in November 2022. Terry
had to be rescued from his property and transported an hour away to a
neighbouring town where he stayed for one month in temporary
accommodaon.
Terry was inially placed in a caravan and then in May 2023, moved into
a pod. He reported feeling extremely traumased, stressed, exhausted
and frustrated from his experience with CommInsure/Hollard.
Presenng
issue(s)
Terry presented for assistance on the 7
th
of December 2022. The
nancial counsellor (FC) asked if there was anything they could do to
assist him. Terry explained that he had lost everything but stated that
he was “one of the lucky ones who had insurance”.
Terry had accepted a selement from Hollard via CommInsure for
repairs to the back room of his house. All other damage was deemed
pre-exisng, including the ooring.
Terry was approved for $12,000 worth of repairs which was then
reduced to $10,000. He informed the FC he has to repair the oors and
everything else at his own expense.
Casework
summary
The FC accessed and applied for a grant from the Commonwealth Bank
for $1,000 on Terry’s behalf. The FC also negoated with Terry’s energy
company for bill relief and organised some vouchers from Saint Vincent’s
De Paul.
By August 2023, Terry reported there had been no further movement
from the insurer with regards to the repairs on his home. He reported
feeling like he had been coerced and bullied into accepng the oer of
repair within a month of the disaster and now realises the repairs are
going to cost much more.
Terry recalled his insurer telling him in those early days that “you would
be best accepng this oer as you may never get it again” realising now
that he was in no state of mind to be making these decisions. He said he
feels that Hollard took advantage of his vulnerability in the aermath of
his near-death experience.
The FC referred Terry to the Disaster Response Legal Service/Legal Aid.
Outcome
In September 2023, works commenced on Terry’s property. Repairs
have been carried out to his back room, with skirng boards, painng
and the ng of a toilet sll to be completed.
Inquiry into insurers’ responses to 2022 major floods claims
41
The Disaster Response Legal Service (DRLS) advised Terry to submit a
claim for damages to the front veranda, as no assessment had been
carried out on the condion of the foongs.
DRLS also advised Terry to submit a claim for his temporary
accommodaon expenses.
Terry no longer feels like one of the lucky ones. He said he knows now
that he was most denitely persuaded by Hollard’s false sense of
urgency at a me when he was not thinking straight.
Inquiry into insurers’ responses to 2022 major floods claims
42
Case study 17: Barry & Liz
Client
background
Barry* and Liz* are a married couple aged 75 and 71 respecvely. They
live in regional NSW and are both in receipt of the Age Pension. In
November 2022 their home was inundated with oodwater up to the
oor level. Even though they did not lose any personal belongings, the
couple were sll required to vacate their property. Thankfully they were
able to stay with a family member.
Barry and Liz were insured with NRMA and have been members for 43
years. Up unl the November 2022 ood, they had never made a claim.
The couple turned down the oer of a temporary pod home as they
thought there may not be enough space in the yard. They wanted to
return home though, so they decided to sleep on makeshi beds in their
shed. At this point in me, Barry is sll sleeping in the shed, but once
the drying machines were removed from the house, Liz began sleeping
on the loungeroom oor on a maress.
The couple said they did not realise it would take this long to have their
insurance claim nalised, especially considering it was only the oors
that needed repairing and now regret the decision to turn down the
oer of a pod. To date, Barry and Liz have had to remove mould and
paint at their own expense.
Presenng
issue(s)
When Liz inially sought assistance from a nancial counsellor, she said
both her and Barry felt extremely stressed and traumased by the
whole experience. She spoke of feeling overwhelmed and angry at how
poorly they had been treated by NRMA and how dealing with them felt
like going round in circles.
The couple had provided NRMA with a quote for the carpet in the
bedrooms for $8,500. NRMA refused to accept quotes from local
businesses stang they were not a “preferred supplier”. Instead, NRMA
insisted on quotes from businesses in towns that were up to two hours
away.
NRMA oered a cash selement for the carpet for $4,500 to which the
couple asked for some me to consider unl seeking further advice.
In the meanme, NRMA told Liz to look for oor les to the value of $55
per square metre. The couple have Italian porcelain les in the living
area of their home. Quotes for removing the les and replacing them
with a dierent type of le ooring are in excess of $7,500 which is far
greater than $55 per square metre.
Casework
summary
The FC advised Liz that if the policy states “like for like” replacement, she
is within her rights to get a quote for the same type of ooring she
currently has.
The FC advised Liz not to accept any selement payment unl seeking
further advice and referred her to the Disaster Response Legal
Service/Legal Aid.
Inquiry into insurers’ responses to 2022 major floods claims
43
Outcome
Barry and Liz have since accepted a cash selement for the carpet at the
quoted price from the local business of $8,500. The couple have been
oered a cash selement for the les at $55 per square metre, which
they have not yet accepted and are seeking further advice.
The repairers appointed by NRMA have now pulled out of the job and
the couple have been asked to get quotes from other builders.
It has also been discovered that the previous quote for the le ooring is
only to replace and not to remove and replace, revealing inconsistences
with the scope of works. It is now ten months on, and they face having
to start the process all over again.
Liz said that her and Barry feel their insurer have taken advantage of
them, especially considering their age and their situaon. She said that
NRMA have shown very lile empathy and kindness throughout this
process. Had the insurer allowed the couple to source supplies locally in
the rst place, it would have saved them a lot of me and stress.
NRMA have now increased the couple’s insurance premium.
Inquiry into insurers’ responses to 2022 major floods claims