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Berkshire Hathaway Specialty Insurance

Insurance as a weapon: report finds cover can be used in financial abuse

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Many Australians are unaware that perpetrators of family and domestic violence can use insurance policies to cause further harm, Allianz Australia says.

Allianz today released a new Understanding Family Violence and Risks of Insurance report identifying key issues and detailing steps to consider in relation to insurance when separating from a partner.

It explains a claim may be declined if malicious damage is intentionally caused by a perpetrator in the home of an ex-partner, for example while seeing children. This may trigger an “invited guest” damage exclusion.

It also warns that where a violence perpetrator remains as a co-insured on a policy, the perpetrator will be informed of any claim lodged and may receive half of any home and contents or other payout - even long after separation.

Other harmful behaviour involves impersonating someone to find out personal information, or intentionally damaging property without revealing an insurance policy had been cancelled.

GM Conduct and Customer Advocacy Sema Musson says Allianz wants to take proactive steps to educate people on how to protect their highly valued assets.

“Between intentionally damaging a property or vehicle, or a perpetrator attempting to derive a financial entitlement from a claim, there is a role for Allianz to inform Australians of potential risks as well as how to support victims who find themselves in an insurance abuse situation,” Ms Musson said.

“A home or a car are often people’s most important financial assets, and we need to ensure there is information and specialist support available to help victims protect these assets so they’re not left financially ruined by perpetrators.”

Allianz research found it was common for insurance products to be used or manipulated by perpetrators to exert control, and that some customers were unaware of the actions taken by the perpetrator where both were named on a policy.

In some instances, customers were too fearful to make a claim in case of triggering further violence or were concerned they would be threatened if they disclosed what had happened.

The report explains that if a policy is in both partner’s names, one can change the sum insured, the address, take the other name off the policy, access address details and cancel the insurance.

“If this is done and if one party is unaware, it can leave that individual in a vulnerable situation when it comes time to make a claim or if they are trying to keep their new address private,” the report said.

Allianz says it is important that customers who escape violent relationships take steps to ensure that the perpetrator is removed as a co-insured an any insurance policies.

In one customer case, an elderly woman experiencing physical abuse from her adult son contacted Allianz to advise she was moving but scared to give out her new address as her son’s wife had called other institutions impersonating her. Allianz was able to place a security word on her account.

Allianz has also provided goodwill payments or vouchers on a case-by-case basis and at times did not impose an excess on a policy to ensure it did not worsen a family violence situation. In some instances, Allianz supported the customer to take out a separate policy in their sole name.

Here are the seven most common insurance vulnerabilities:

- Claim may be declined if malicious damage is intentionally caused by a perpetrator invited into the customer’s home who is not on the policy

- Claim may be declined if damage is intentionally caused by a perpetrator named on the policy

- Customer pays insurance excess to avoid aggravating a perpetrator

- Perpetrator cancels insurance policy without partner’s knowledge

- Customer can’t pay for insurance after leaving an abusive relationship

- Perpetrator uses insurance arrangements to access information to stalk ex-partner

- Perpetrator can demand half an insurance payout if named on the policy

If you suspect that you or someone you know is in an abusive relationship, call the National Domestic Violence and Sexual Assault Hotline at 1800 737 732 or 1800RESPECT.