Insurance cover: most don't have a clue
THE majority of Australians believe insurance companies try to unfairly avoid paying out after natural disasters.
They also believe insurance companies try to underpay when they do agree to a claim.
Polling by UMR Research early last month of 1000 people found that when they were asked to think of home insurance, and whether insurance companies tried to unfairly avoid paying out after natural disasters, 69 per cent agreed and 15 per cent disagreed.
When asked if they believed that insurance companies tried to underpay when they did agree to pay out, 61 per cent agreed and 13 per cent disagreed.
The polling was conducted between December 3 and 7, before devastating bushfires in Tasmania destroyed hundreds of homes and buildings, leading to more than 520 insurance claims worth $52.5 million.
It also came before a record-breaking heatwave hit the country last week, when the average maximum national temperature hit record highs.
The survey found that 52 per cent of respondents were not sure if their home insurance would cover them for a bushfire (as opposed to a house fire), while 49 per cent were not sure if their homes would be covered for cyclones and tornadoes.
UMR managing director John Utting said it was amazing how uncertain people were about insurance coverage for their family's biggest asset.
"People know more about their phone bill than their home insurance policy conditions, and they should scrutinise their policy more closely," he said.
An Insurance Council of Australia spokesman, Campbell Fuller, said the industry was aware of perceptions that it did not pay out claims, but in reality more than 98 per cent of claims were paid out across 2011 and 2012, from 11 declared catastrophes.
"The facts are that we paid out more than $5.4 billion in disaster claims across 2011-12, and we expect to pay out more than $52 million from the recent bushfires in Tasmania," he said.
"In general, insurers pay out more than 98 per cent of all claims they receive, to a value of about $110 million every day."
The survey found Queenslanders were the most sceptical of all Australians, with 75 per cent believing insurance companies try to unfairly avoid paying out after natural disasters.
New South Wales (71 per cent) and Western Australia (69 per cent) were the next most sceptical.