Did You Know

Replacement Means Replacement

In both contents and building claims, if your policy says that you are entitled to replacement, then that is what you must get.  Unless your policy expressly says so, (and virtually none do) an insurance company cannot:

  • Force you to accept a lesser quality house;
  • Insist that you replace items such as jewellery and then only give you a reduced or depreciated amount to spend;
  • Make you build with inferior materials such as insisting on particle board floors when you had tongue and groove;

Just because it can’t be seen does not always mean that it shouldn’t be replaced.  An insurance company cannot always insist that items such as charred or smoke damaged beams or stained walls be painted over and left, just because they are out of sight.  If it is damaged it should be replaced.

Fraud or False Statements

An allegation of fraud or of a false statement or exaggeration is basically an allegation that you are a criminal.  An insurance company cannot make such allegations without clear and convincing evidence, almost to the level of beyond reasonable doubt.  You don’t have to prove you are telling the truth.  The insurance company must prove you are lying.  And this must be proven to the highest level of evidence.  A false allegation of fraud by an insurance company exposes it to significant damages for breaching its obligation of good faith.

Endless Delays

At law an insurance company must settle your claim within a reasonable time.  That means that the insurance company can carry out inquiries and seek information, but there is a limit to how long the insurance company can delay settling your claim.

Life Insurance Payout

In the case of a life insurance claim, the insurance company must pay within 90 days of becoming liable to pay, or pay interest from that date.

Additional Items

After a burglary, fire or other major claim, it is common to find items missing long after the event.  As long as you act reasonably, an insurance company cannot force you to ‘sign away’ your right to claim for further items, should they genuinely be noticed at a later date.

Documentary Proof of Ownership

Unless your policy specifically says so, your insurance company cant refuse to settle your claim just because you can’t provide documentary proof of ownership.  Many insurance companies refuse claims on this basis

Exclusion Clauses and Causation

Even if you breach your policy, in many cases the insurance company must pay your claim if you can prove that the circumstances leading to the breach did not cause or contribute to the loss or damage.  This particularly applies to exclusions for:

  • Alcohol consumption
  • No Warrant of Fitness
  • Bald Tyres
  • Unlicensed or Restricted Licensed Drivers
  • Un-activated Alarms
  • Underage Exclusions

Human Rights Act

Insurance companies cannot refuse to insure you on grounds set out in the Human Rights Act 1993. These include sex, race, age, religion, sexual orientation, disability and employment status. An insurance company can charge you more or impose terms on the grounds of sex, age or disability, but only if the insurance company can justify the extra charge. The human Rights Commission has a helpful publication called "guidelines on insurance and the Human Rights Act" that can be downloaded from their website at www.hrc.co.nz.  They can charge you more or impose terms on certain specified grounds...but they can't refuse to insure you.

Privacy Act

With very limited exceptions, an insurance company must provide you copies of all “information” about you or your claim.  That means more than just a copy of your claims file.  It may include

  • computer or electronic records of sales, underwriting or claims interactions;
  • internal memoranda or e-mails

If you know what to ask for there’s a huge amount you’re entitled to receive.

Fair Insurance Code

Most major insurance companies in New Zealand are members of the Insurance Council of New Zealand.  To find out which companies are members go to www.icnz.org.nz The ICNZ is a body whose objects include representing the interests of insurance companies.  It is not a government or regulatory authority and membership is voluntary.

Except for the Insurance and Savings Ombudsman Scheme, the ICNZ has no authority to direct members to do or not do anything.

Members of the ICNZ are bound by the Fair Insurance Code and must comply with its rules.  It may be helpful to review the code at www.icnz.org.nz.  It is all about knowing your rights.

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