Insurance disputes soar as weather and travel risks increase
Insurance disputes are skyrocketing as severe weather events increase the number of cases coming to the Financial Ombudsman Service (FOS).
In its first annual review, FOS says disputes for the year to June 30 rose at an average of 22.8% across the financial services sector.
Chief Ombudsman Colin Neave says the rise is largely due to the “current global financial circumstances” and disputes are expected to rise even further.
Insurance Ombudsman Sam Parrino told insuranceNEWS.com.au the service’s general insurance division handled a 12.6% increase in new cases during the year.
He says weather-related claims are mainly responsible for the rise. “Weather-related events, global warming and climate change are driving an increase in cases, with most of these coming out of NSW and Queensland.”
Mr Parrino says he expects a sharp increase in travel insurance disputes after the civil unrest in Thailand and Greece and terrorist attacks in Mumbai, in which many holidaying Australians were stranded or treated at local hospitals.
“Travel insurance is likely to punch above its weight,” he said. “The unrest is certainly going to lead to an increase in disputes.
But he noted some travel insurers, at least, are taking a liberal view of claims from the Mumbai and Thailand events. Last week insuranceNEWS.com.au reported major travel insurer Mondial Assistance would ignore the “state of emergency declaration” exemption in policies for affected policyholders.
“Pleasingly, some member companies are paying claims where legally they are probably not required to,” Mr Parrino said.
In its first annual review, FOS says disputes for the year to June 30 rose at an average of 22.8% across the financial services sector.
Chief Ombudsman Colin Neave says the rise is largely due to the “current global financial circumstances” and disputes are expected to rise even further.
Insurance Ombudsman Sam Parrino told insuranceNEWS.com.au the service’s general insurance division handled a 12.6% increase in new cases during the year.
He says weather-related claims are mainly responsible for the rise. “Weather-related events, global warming and climate change are driving an increase in cases, with most of these coming out of NSW and Queensland.”
Mr Parrino says he expects a sharp increase in travel insurance disputes after the civil unrest in Thailand and Greece and terrorist attacks in Mumbai, in which many holidaying Australians were stranded or treated at local hospitals.
“Travel insurance is likely to punch above its weight,” he said. “The unrest is certainly going to lead to an increase in disputes.
But he noted some travel insurers, at least, are taking a liberal view of claims from the Mumbai and Thailand events. Last week insuranceNEWS.com.au reported major travel insurer Mondial Assistance would ignore the “state of emergency declaration” exemption in policies for affected policyholders.
“Pleasingly, some member companies are paying claims where legally they are probably not required to,” Mr Parrino said.