The Financial Rights Legal Centre has released a report highlighting a list of insurance issues faced by consumers who were affected by extreme weather events in the 18-month period to April.

Topping the centre’s list are allegations of poor claims handling, including delays and perceived bullying, with 20.4% of the 706 clients who sought help from the consumer advocacy centre saying they experienced the problem.

Cash settlement placed second (15.7%), followed by defect clause (8.8%), underinsurance (7.9%) and maintenance (6.7%).

The report, titled “Exposed: insurance problems after extreme weather events”, covers eight catastrophes, starting with the Black Summer bushfires event in November 2019 and concluding in April with Cyclone Seroja.

“This 18-month period was extraordinary for the number and severity of extreme weather events,” the centre’s CEO Karen Cox said.

“When catastrophe strikes, people need help on a number of fronts including dealing with their insurer. In this fraught and traumatic environment, disputes are inevitable.”

Ms Cox says governments and the insurance industry need to work together with consumer groups to urgently address the issues highlighted in the report.

“What our clients’ experiences have shown us is that… it’s really, really difficult for people who have been impacted by sometimes really nasty and distressing events,” Ms Cox told insuranceNEWS.com.au.

“That trauma is compounded by their experiences of dealing with the insurance companies.”

While the number of requests for assistance is small relative to the overall claims that have been lodged with insurers from the eight catastrophes, the report says steps must be taken to address the failings as extreme weather events “are steadily becoming the new norm”.

“It is evident that events are already playing out as the science predicts,” the report says. “Climate science tells us that these risks are likely to increase, or move to new areas not previously subject to such events.”

The Insurance Council of Australia (ICA) has responded to the report, saying the industry has paid out more than $5.4 billion in natural disaster claims since the Black Summer bushfires catastrophe in late 2019.

“ICA notes the [centre’s] comment that ‘requests for assistance is small compared to the number of claims relating to these catastrophic events’,” a spokesman for the insurers’ peak body told insuranceNEWS.com.au.

“Insurers received more than 39,000 claims arising from the bushfires alone, totalling more than $2.3 billion dollars.

“More than 95% of these claims are now finalised and paid, supporting those communities in their recovery.”

The spokesman says the industry’s new code of practice, which came into effect this month, has a number of provisions covering the issues raised in the centre’s report.

Code provisions include obligations to provide consumers with access to a sum insured calculator for home building insurance, better information about cash settlements, and treating total loss claims with sensitivity.

“The code clearly sets out that insurers will respond to catastrophes efficiently, professionally, practically and compassionately,” the spokesman said.

Click here for the report.