Insurance Insider Warns of 'Dirty Tricks' by Major Brands
A former insurance risk and compliance expert identifies specific companies and practices that he claims disadvantage policyholders during claims.
An insurance industry veteran with a decade of experience in risk and compliance has identified several major Australian insurance brands, including those operated by Auto & General, such as Budget Direct, Qantas Insurance, and Coles Insurance, as companies he would personally avoid.
Luke Dugdell, founder and managing director of Claims Hero, a firm that assists consumers with insurance claims, stated that he witnessed numerous instances of everyday Australians struggling to have their claims processed fairly. "After years of watching consumers being taken advantage of, I decided to walk away from the industry and fight for the people I once watched struggle," Dugdell said.
During an interview, Dugdell detailed what he described as concerning practices, including insurers allegedly withholding crucial information from policyholders. He cited a case where a homeowner was not informed for two years about a report indicating potential mould issues on their property. Dugdell claimed that despite repeated requests, even under the General Insurance Code of Practice and the Privacy Act, the insurer refused to provide the document. "Withholding information from a consumer is just unconscionable because the power imbalance is massive," he stated, advocating for stronger legislation to mandate information disclosure.
Another practice Dugdell criticized involves vaguely worded "good condition" clauses in insurance policies. He argues these clauses can be exploited by insurers to deny repair claims, with policyholders sometimes presented with extensive and costly maintenance lists that may not be directly related to the initial claim. "The good condition terminology is so broad it just gives them basically the ability to not repair homes if they don't want to," he explained.
Dugdell also raised concerns about QBE Insurance and its use of loss adjusters. He suggested that some loss adjusters pressure builders to reduce their quotes, potentially leading to policyholders receiving less than their entitled claim amount. "I've seen it in reports where they'll go, a loss adjuster will take $7,000 out of a quote for a builder," Dugdell said.
Furthermore, Dugdell criticized QBE's approach to investigating suspected fraud, describing it as overly intrusive. He alleged that policyholders might be subjected to filmed interviews and compelled to provide sensitive financial and phone records under threat of claim rejection. "It just angers me so much because it often causes delay and extreme stress, and it would just be over something simple," he commented.
Dugdell advised Australians against selecting insurance policies based solely on price, emphasizing the importance of carefully reading policy terms and conditions. He urged consumers to challenge unfair decisions and seek clear explanations regarding how their claims are assessed.
In response, a spokesperson for QBE stated that Dugdell's claims do not accurately represent the company's claims handling process, asserting that QBE is committed to treating customers fairly and assessing claims based on individual circumstances and policy terms.
Auto & General, through a spokesperson, criticized Claims Hero as a "for-profit disaster chaser" and expressed disappointment that the podcast did not explore how Claims Hero is compensated. The company affirmed its compliance with the General Insurance Code of Practice and the Privacy Act regarding claims documentation and highlighted its record of paying out over $2 billion in car and home insurance claims in the past year.