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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