Public cynical over payouts for disaster claims
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 when insurance companies did agree to pay out they tried to underpay, 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 peaked at 40.33 degrees last Monday.
However, 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 things such as tornadoes and cyclones.
The managing director of UMR, John Utting, said it was amazing how uncertain people were about their 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.
A spokesman for the Insurance Council of Australia, 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 last year, 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," Mr Fuller said.
"In general, insurers pay out more than 98 per cent of all claims they receive, to a value of more than $110 million dollars every day."
The survey found Queenslanders were the most sceptical of all Australians, with 75 per cent believing that insurance companies try to unfairly avoid paying out after natural disasters.
NSW (71 per cent) and Western Australia (69 per cent) were the next most sceptical states.
Frequently Asked Questions about this Article…
UMR Research polled 1,000 people (Dec 3–7) and found 69% agreed that insurance companies try to unfairly avoid paying out after natural disasters, while 15% disagreed. The poll also found 61% believed insurers try to underpay when they do agree to pay, with 13% disagreeing.
The survey found large uncertainty: 52% of respondents were not sure if their home insurance would cover them for a bushfire (as distinct from a house fire), and 49% were not sure whether their home would be covered for events such as tornadoes and cyclones.
The article reports the devastating Tasmanian bushfires destroyed hundreds of homes and buildings and led to more than 520 insurance claims worth about $52.5 million.
A spokesman for the Insurance Council of Australia, Campbell Fuller, said the industry paid out more than 98% of claims across 2011 and the previous year from 11 declared catastrophes. He also noted insurers paid more than $5.4 billion in disaster claims across 2011–12 and expected to pay more than $52 million for the recent Tasmanian bushfires. The council added insurers pay out more than 98% of all claims they receive, valued at over $110 million every day.
The survey found Queenslanders were most sceptical (75% believed insurers try to unfairly avoid paying out), followed by New South Wales at 71% and Western Australia at 69%.
John Utting, managing director of UMR, said it was surprising how uncertain people were about their home insurance and advised that people should scrutinise their policy conditions more closely — noting that many people know more about their phone bill than their home insurance policy.
Yes. The poll was conducted between December 3 and 7, which was before the Tasmanian bushfires referenced in the article and before a record-breaking national heatwave that pushed the average maximum temperature to 40.33 degrees Celsius.
The results highlight a gap between public perception and industry payout statistics: many people distrust insurers yet insurers report high payout rates for disasters. For everyday investors and homeowners, the takeaway in the article is to check and understand your own home insurance policy — especially disaster coverage — because significant claims and large payouts do occur, but coverage specifics can vary.
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