Complaint enquiries to New Zealand’s Financial Services Ombudsman jumped to 3805 in the year to June 30, up from 3357 in the previous year, with the most common complaint issues centred on insurance policy exclusions, scope of cover, non-disclosure, pre-existing conditions and gradual damage.

Complaint numbers were close to steady at 322, against 320 the previous year, with 225 or 70% about general insurance. Of the total, 91 complaints were about house insurance, 54 travel, 46 vehicle, and 22 contents insurance.

“Complaints continue to show that many people simply don’t understand the policy or the contract they’re signing up to,” Insurance and Financial Services Ombudsman Karen Stevens said.

“Communication between financial service providers and their customers must improve.”

Seventy-five complaints resulted in $NZ1.8 million ($1.68 million) being paid by participants to consumers, not including weekly disability benefit payments under income protection, superannuation or life policies.

In one settled complaint, a woman who made a claim for cracking walls from roadworks received from her insurer a detailed apology, a payment of $NZ50,000 ($46,750) and cash towards legal fees after the Ombudsman found it had significantly breached the industry code with delays, lack of transparency and follow-up relating to incomplete repairs.

A quarter of complaints were about health, life and disability insurance, 12 about credit contracts, and three about financial advisers.

The Ombudsman has been more involved with the Insurance Council of NZ’s Fair Insurance Code, with increased complaints about breaches of transparency and delays, Ms Stevens says.

“Often the breaches are only technical but lead to useful learnings for general insurers about compliance and better communication with customers,” she said.