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Insurer fails to sufficiently notify of cover reduction...
The Insurance and Financial Savings Ombudsman has upheld an insured’s claim over damage to their car.
They insured the car for an agreed value of $19,000 and the car was written off just over a year later in a flood.
The insurer declined to pay the $19,000 as it had on policy renewal reduced the insured value to $14,400. This was notified to the insured, but the 24% drop was not highlighted.
IFSO found that it was unreasonable to put in place such a big drop in cover without highlighting the change, as it was an unusual change. The insurer agreed to pay $17,500 to settle the claim.
It pays to carefully read your policy and all communications and to arrange the cover you need.
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