New Zealand’s Insurance & Financial Services Ombudsman Scheme received a record number of almost 5000 enquiries in the past year, a 21% increase.

Ombudsman Karen Stevens says customer service issues and delays were the predominant issue, and about 8% of complaints were about insurance claims from the Auckland floods and Cyclone Gabrielle early last year.

Consumers complained about house insurance most, accounting for 24% of all enquiries, followed by travel cover at 18% and motor vehicle at 17%.

IFSO investigated a record 479 complaints in the year, and an increase in the cost of insurance was a top-five issue.

“We also received many more complaints relating to business-as-usual insurance claims, which were impacted by the delays caused by the approximately 118,000 weather event claims,” she said.

“The extensive nature of the weather events obviously impacted the insurers’ abilities to respond quickly and effectively to claims, and consumers have understandably been frustrated by the long time it’s taken to get their claims resolved.” 

Ms Stevens says despite the record figures, it is clear “there have been lessons learnt and improvements made”, as insurers took less time to process claims than after the Christchurch earthquakes of 2011.

She says issues sometimes arose from consumers not understanding what their policies covered.

“For example, most house insurance only covers sudden damage, not gradual damage. If a house already had issues before a weather event, it's unlikely that insurance will cover the cost of fixing those pre-existing problems,” she said. 

About 68% of the complaints IFSO investigated were about general insurance. About 21% concerned health, life or disability insurance, and about 11% other financial services such as loans and credit or financial advice.

IFSO is one of four approved dispute resolution schemes in New Zealand, alongside the Banking Ombudsman, the Financial Dispute Resolution Service, and Financial Services Complaints, with which IFSO is considering merging from July next year.

There are 52 insurers in the IFSO scheme, 494 financial advisers, 535 financial advice providers and 1713 other financial service providers such as lenders.