Just because your insurer has rejected your claim, does not necessarily mean that your case is closed.
If you think that you have been unfairly treated, here are some ways to get the insurer decision overturned.
What to do
- Inform the insurance company as soon as you can following the event. It is sometimes a good idea to write the details of the event as soon as you can, and then use that as a reference to make the written claim.
- Be consistent. Remember, it will be awkward if you want to change your story later on.
- Keep all documents that are relevant to the claim.
- Make sure the staff of the insurance company can get in touch with you.
If the claim is rejected?
Insuring your most valuable asset
While many people would consider their home or their car to be their most valuable asset, it's your ability to earn an income that is most important in shaping your financial future. Statistically, two thirds of working Australians will suffer an injury or illness that will sideline them for 90 days or more. The majority of these people would not be able to pay their mortgage or meet car finance and other loan commitments without adequate income insurance.
There are circumstances where you may in fact have the legal right to be reimbursed for your loss even though the insurer refused to pay the claim. Although you can sometimes make this judgement yourself, it is sometimes a good idea to get legal advice. See our fact sheets on "Disputes".
Check the policy
If the claim is rejected ask your insurer to identify specifically the clause of the contract on which they rely. If you do not have a current policy make sure they supply one.
What caused the loss?
If the insurer claims that you caused the loss, and this is in breach of the policy, make sure that this is so.
For instance, if you were smoking in bed at the time of a fire, and a fire caused this way is a breach of your policy, you may not in fact be in breach if the fire was caused by an electrical fault. In this case the fact that you were smoking in bed would be coincidental and not the cause of the fire.
The policy may stipulate that a known pre-existing situation or condition is not covered. For instance, if you have disability insurance but at the time you signed the policy you had a tumor. However, under the law it would be crucial whether you actually knew you had this condition. If you were unaware of it you should still be covered.
Ignorance of the terms
Under the law the insurer has a legal obligation to inform you about the restrictions in the insurance policy. This must be done before you sign the application and the policy is issued. This means (in part) that:
- you must be given a copy of the policy; and
- the wording of the policy must be clear and unambiguous.
If these pre-conditions were not met it may be possible to retain your coverage for your loss. Again, it may be necessary to obtain legal advice.
Is it worth the claim?
Many types of insurance contracts will have an excess. This is common in a car insurance contract, or similarly you may lose part of the no-claims bonus. Some companies now reward rating one drivers with a lifetime rating one guarantee. At times you will have to decide whether the amount of the claim is worth the long term loss that results from the effect on rating or no-claims bonuses, especially after taking into account the amount of the excess.
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