The General Insurance Code Governance Committee has made its first determination under new financial hardship provisions, according to the Financial Ombudsman Service (FOS).

The order follows an investigation into the case of a customer with comprehensive motor insurance who was involved in a single-vehicle accident.

He lodged a claim, but was told by his insurer’s service supplier to pay a $750 excess, which he could not afford.

When he asked for financial hardship assistance, he was told he would not qualify.

As a result, he borrowed $650 to pay for repairs that he arranged himself.

Under the code, insurers are obliged to consider such requests, providing a financial hardship assistance application form and contact details for the national financial counselling hotline.

The committee notified the insurer of the code breach, which prompted it to waive the excess and reimburse the customer’s repair costs.

“The committee determined the insurer had breached the code by failing to appropriately consider the customer’s request for financial hardship assistance,” FOS says.

“Acknowledging the breach, the service supplier implemented refresher training on financial hardship for staff and team managers, which was supervised by the insurer’s claims delivery manager.”