Insurance
Understanding insurance and the best approach can be complex. Here are the steps that the Insurance Council of Australia advise when it comes to making a claim:
- Contact your insurer and lodge your claim - you can do this even if you don’t know the full extent of your loss. You can lodge your claim online, by telephone, or in person.
2. Clean up and make safe - Disasters are dangerous and your safety should always be your first priority. Do not return to your property until emergency services instruct you to. Consider registering for a clean-up with Emergency Management Victoria- it is advisable to do this even if you have insurance.
Document your damage as soon as possible to support your insurance claim – photos are the best method. Your insurer may arrange for works to remove any hazards and prevent further damage. This can include removing loose debris, isolating electrical circuits, or installing a roof tarp. Speak to your insurer before you authorise any building work.
3. Assessing the damage - someone will be appointed to inspect the damage to your property.
4. Claim decision - your insurer will make its decision to accept or decline your claim based on your policy provisions, its assessment of damage and expert reports. It may also use public information sources like Bureau of Meteorology weather data.
Where claims are accepted, a ‘Scope of works’ document will be developed, setting out the repair and rebuild work to be completed. It’s important to read this document carefully. The scope of work may need revisions after repairs have started or if further damage found. This is a normal part of the process.
5. Settlement of your claim - your insurer will discuss the settlement of your claim with you:
- Repair, replace, rebuild: In the case of rebuild, your insurer will authorise a builder to complete your repairs. The builder will arrange contracts, provide you a schedule, and manage approvals - OR
- Cash settlement: you may take a cash settlement to manage the repair or rebuilding work yourself. It’s important that you follow regulations and codes and use a licensed builder. If you fail to do this, your home may not be insurable in the future.
If you want some advice on what you should do about insurance and your legal rights, ARC Justice can assist.
Cash settlements
A cash settlement is an amount of money offered by your insurance company for you to settle all or part of your home building insurance claim. This is instead of the insurance company managing the repair or rebuilding what was damaged or destroyed.
If your insurer offers you a cash payment to settle part or all of a home building insurance claim, and your policy gives you the option to choose between a cash payment and another form of settlement, the insurer must provide you with a ‘Cash Settlement Fact Sheet’.
This must show the settlement options, total amount being offered with a breakdown, rights of review, and advise you to consider getting independent advice.
It must also be titled, dated, in writing, and easy to understand. Information in this document may be included in the Cash Settlement Fact Sheet for a home building insurance policy or be provided separately by your insurer.
There is more information on cash settlements on the Insurance Council of Australia website
Are you an impacted business?
Many businesses may have Business Interruption (BI) cover in their business insurance policies. Each policy varies according to the business, but in general BI is designed to cover a loss of profit while a business cannot operate due to certain insured events, for example the closure of premises by a public authority.
If you have Business Interruption cover the Insurance Council of Australia has tips and advice and what you need to do.
Complaints
The Insurance Code of Practice requires insurance companies to be open, fair and honest in dealings with customers and commits insurers to high standards of service when selling insurance, dealing with claims, responding to disasters and handling complaints.
If you need to make a complaint the Insurance Council of Australia has further details on what to do.