The recent storms across Victoria, storms caused widespread devastation and resulted in tens of thousands of claims to insurers.
Warren Day, ASIC’s (Australian Securities & Investments Commission) Victorian Regional Commissioner and Chief Operating Officer, joined ABC Melbourne Drive’s host, Raf Epstein, to discuss how to manage after a natural disaster, where to find help and dealing with your insurer.
Contact your insurer early and often
‘At times like this, your insurer is the best source of advice and assistance. Contact your insurer early and often – they can tell you how they can help, they may be able to provide emergency accommodation and financial support and other services as part of your claim’, Warren says.
‘First and foremost is your safety – people should only return to their properties when it is safe to do and they’ve been cleared by the local authority.’
‘You don’t have to wait to speak to your insurer to start cleaning up, but before you do anything, take photos or video to give to your insurer. Prioritise removing spoiled food, water or mud-damaged goods from your property that might pose a health risk.
‘Take safe and reasonable steps to prevent any further damage to your property and belongings. For example, covering damaged roofs to prevent further water damage.
‘Before making any repairs to your property, check with your insurer as they may need to authorise repairs and tradespeople’, Warren says.
Don’t worry if you don’t have your insurance policy documents, your insurer will have those. If you can’t remember who your insurer is, contact the Insurance Council of Australia’s disaster insurance hotline (1800 734 621), and they will help you find your insurer. Some insurers are even proactively contacting their policyholders and we know some insurers have already had assessors ‘on the ground’ since the weekend.
The Insurance Council has declared these storms and floods a ‘Catastrophe’, which means these claims will have priority.
‘Ask your insurer or an authorised, trusted insurance broker or financial adviser to explain how to make a claim. The Insurance Council covers the key steps of the claims process.
‘Keep communicating with your insurer and ask questions if you don’t understand something’, Warren says.
Watch out for fake tradespeople
‘Unfortunately, events like this can bring out ‘disaster chasers’ – unscrupulous operators, so be on the lookout, and if in doubt, contact your insurer.
‘Be wary of anyone who asks you for payment up front OR to sign a contract immediately’, Warren says.
Settling your claim
Consumers may be offered the option of having:
- the insurer manage their rebuild up to the value of the sum-insured, or
- a cash settlement (which can be a poorer financial outcome for the consumer based on the associated costs for building materials and suppliers).
Think carefully about a cash settlement as it may not cover the cost of repairs, nor will the work be guaranteed by the insurer.
If you have a mortgage, contact your lender to understand if they may use any cash settlement to reduce the loan instead of using the cash to fix (or replace) the damaged property.
Visit ASIC’s Moneysmart website (www.moneysmart.gov.au) for further information on what to do after a natural disaster and to find contact details for free legal services, financial counsellors and crisis support services.
Source: © Australian Securities & Investments Commission. Reproduced with permission.