The insurance ombudsman service

Contributed by Greg Pynt and current to 1 September 2005

WHAT CAN YOU DO IF YOU ARE NOT HAPPY WITH HOW AN INSURANCE COMPANY HAS DEALT WITH YOUR CLAIM?

Firstly, you can ask the person dealing with your claim to refer it to the insurance company’s Internal Dispute Resolution (IDR) process. Most insurance companies have this process available to its insureds. According to this process, the insurance company is obliged to provide you with an IDR decision within 15 business days of receiving your request to review the handling of your claim.

If you do not agree with the outcome of the insurance company’s IDR process, you can contact the Insurance Ombudsman Service by telephone or in writing, with a request that the Service try to resolve your dispute with the insurance company (assuming the Service has the jurisdiction to do so – see below). You must contact the Service within 3 months of the IDR decision. See below for their contact details.

The Service is administered by the Insurance Ombudsman Service and is financed by the insurance industry. The Service has jurisdiction to deal with disputes relating to most domestic insurance (including home building, home contents, motor vehicle, travel, sickness and accident, consumer credit, pleasure craft, valuables and personal property, medical indemnity insurance), some residential strata title insurance, small business insurance and third party motor vehicle disputes (where property damage is under $3,000).

If you refer the dispute with your insurance company to the Service, you will be asked to complete a Referral Notice. After receiving the completed Referral Notice and gathering the relevant information, a Case Manager will try to resolve the dispute by speaking with you and the insurance company.

If this is unsuccessful, you can ask for the dispute to be referred to an Adjudicator (who can decide disputes up to $5,000), a Referee (where fraud is alleged) or the Claims Review Panel, which decides all other disputes.

The decision (with reasons) will be made in writing and is usually made on the basis of documents provided by you and the insurance company, without the need for you to attend a hearing. Lawyers can appear before the Panel, but it is discouraged.

The Service is free and you are not bound by the decision. If you are not happy with the result, you can sue your insurance company in the Courts for the same claim. By contrast, the insurance company is bound by the decision of an Adjudicator, a Referee and the Panel (up to $150,000). The Panel can also recommend settlements up to $290,000.

You can contact the Service as follows: Telephone 1300 78 08 08 (for the cost of a local call) or write to it at PO Box 561, Collins Street West, Melbourne, Vic 3007.

You can also contact it by email at ioc@insuranceombudsman.com.au. Or visit its website at www.insuranceombudsman.com.au.