The Australian Financial Complaints Authority has ordered a broker to pay $1250 compensation and apologise for failures in chasing up a claim that was lodged after several units were damaged in a storm and flooding.

“While I accept the insurer is responsible for the claim decision, the broker should be adding their expertise to assist the complainant with the information or evidence that is required,” the authority’s decision states. “The broker also has a role in updating their client and regularly following up the insurer to ensure progress is being made. If this is not the case, the onus becomes to keep the complainant clearly informed of progress.”

The authority has already released a separate decision regarding the insurer.

The adjudication against Arthur J. Gallagher says the broker did not provide regular updates on the status of the claim, lodged by a body corporate in early 2022, or provide acknowledgment of a submitted supporting document.

In an example given, the complainant emailed the assessor and copied in the broker for an update on August 9, 13 and 29 in 2022, but only received a response from the broker on August 30.

“The broker agrees it should not have required several follow-ups before a response was provided,” the decision says. 

The authority says it asked the insurer to provide a “substantive” response to the complaint and contacted it by email/letter and phone call on May 2 last year, then by email/letter on May 23 and August 23. 

The only response came in a November 23 email saying the complaint should be against the broker.

“The insurer has not provided the requested information and has not given any reasonable reason why it is unable to do so. This determination has therefore been based on the available information and consideration of what is fair in all the circumstances.”  

The authority says the complainant is entitled to compensation for non-financial loss and a letter of apology from the broker because it failed to provide the service that should have been expected. 

“While the broker has limited means to compel outcomes from the insurer, it still has an onus to act in the complainant’s best interest. This includes regularly following up their claim outcome and communicating progress or lack of by the insurer,” it says. 

“Where the broker does not meet their onus, it is fair for them to compensate the complainant for the ways in which their service falls short of good industry practice.” 

The decision is available here.