The industry ombudsman has told Suncorp to pay a motor policyholder $2500 compensation after it failed to identify her as a vulnerable customer and caused stress through its communications.

The customer contacted the insurer last August 21 to find out the cost of adding another listed driver to her policy, and was told it would be $253.96.

The insurer issued updated policy documents and an invoice to be paid within 14 days. It later told the woman that if she did not pay by September 16, it would cancel the policy.

When that deadline arrived, the woman said she no longer wanted to add the driver and would not pay. She said she had a newborn child, was stressed and was having an emotional breakdown.  

The insurer’s agent said the company could not backdate the driver’s removal but would offer a pro-rata premium of $20.90 to pay.

The woman did not agree to this and wanted the insurer to waive the premium.  

Suncorp told the woman on September 26 that the policy had been cancelled and it would issue a premium refund of $732.07.  

The customer said she would contact the Australian Financial Complaints Authority over the decision and did not want her policy reinstated.

But she later emailed Suncorp saying she wanted the policy reinstated at the insurer’s cost.  

On October 15, Suncorp agreed to reinstate the policy after waiving the pro-rata premium and cancelled the $732.07 refund.  

The woman argued the insurer should still repay the premium because it incorrectly cancelled her policy and had already agreed to the refund. She added that a Suncorp representative told her the refund was delayed because she decided to file a complaint with AFCA.

In its dispute decision, AFCA says the insurer need not return the premium, given it reinstated the policy.

It says it cannot determine on the allegation against the insurer’s representative due to the lack of evidence, but it criticises Suncorp’s handling of the matter.  

“The discussions on September 16, were clearly upsetting for the complainant, and the information should have been conveyed to her in a clearer and more empathetic manner,” an authority ombudsman said.  

“I am also satisfied that the insurer should have identified and managed the complainant as a vulnerable person.

“It was readily apparent that was the case during the telephone conversations on September 16 and 30, and from the complainant’s emails dated October 8 and 9 2024.”

The insured initially sought $2000 compensation, but she lifted this to $100,000 – a sum AFCA cannot impose. Suncorp had agreed to offer $2000.

AFCA says $2500 is a fair amount for the insurer to pay. Click here for the ruling.

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