Financial hardship
The Insurance Code deals with three situations of policyholder hardship:
policyholder is in urgent financial need;
policyholder owes an insurer; and
policyholder is vulnerable.
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Where a policyholder has made a claim, is in ‘urgent financial need’, and can demonstrate the urgency of their situation, an insurer will fast-track the assessment and payment of the claim or make an advance payment or both (Insurance Code pt 8).
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Where a policyholder or other party is indebted to an insurer (but not in respect of the premium) – for example, a policyholder who is having difficulty paying an excess, or a third party from whom an insurer is seeking to recover money is suffering financial hardship – an insurer will consider providing assistance by modifying the terms of payment, or waiving or discharging the debt (Insurance Code pt 10).
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Insurers are committed to taking extra care of vulnerable policyholders. Part 9 of the Insurance Code sets out a range of factors that may give rise to vulnerability, including age, disability, language, family violence, and remote location.
Financial hardship
Chapter: 10.4: Insurance
Contributor: Mark J. Attard, Partner, Kennedys Law
Current as of: 1 September 2024
Law Handbook Page: 865
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