How Australians Get Ripped Off On Home Insurance: An Insider Explains

Overview

The program interviews Luke Dugdell, a former insurance-industry risk and compliance worker who now assists policyholders through Claims Hero. Drawing on a decade working inside insurers and his experience with claimants, Dugdell argues that insurance claims can add years of stress after disasters. He points to delays, inadequate repairs, confusing reports and pressure to accept low settlements.

The host cites more than 34,000 insurance-related complaints received by the financial ombudsman last year. The program also notes that a federal court fined Hollard $2 million over a storm-damage claim that remained unresolved for 15 months.

Understanding coverage

Dugdell says homeowners may discover only after a disaster that their policy does not cover what they assumed it did. Coverage varies, exclusions can be buried in lengthy policy documents, and clauses requiring a home to be in “good condition” may be used to dispute claims.

He also warns that familiar brands may sell policies underwritten by another insurer, a practice known as white labelling. As a result, consumers may think they are comparing different providers when they are not.

His advice is to:

• Read the actual policy and check its exclusions.
• Consider the property’s specific risks and contents.
• Avoid choosing a policy based only on brand or price.

Claims and repairs

Dugdell criticizes practices that he says can prolong disputes, including using contractors paid to keep costs down, pushing cash settlements that may not cover proper repairs, withholding reports and conducting fraud investigations in ways that intimidate claimants.

He warns that delays can worsen water damage and mold problems. While noting that he is not a mold specialist, he says assessments should be conducted by properly qualified people and that the underlying cause of moisture problems needs to be addressed.

Premiums and comparison shopping

Dugdell acknowledges that catastrophe risk and reinsurance costs can contribute to rising premiums, but says insurers’ pricing is not fully transparent. He suggests that renewal prices may sometimes fall if customers call and negotiate.

He sees competition as an important check on premiums, but says white-label arrangements and comparison sites that cover only a limited number of insurers can make it harder to compare policies genuinely. He also calls for greater disclosure of sales commissions and information insurers hold about claims.

Regulation and dispute resolution

Dugdell argues that industry self-regulation has failed and calls for stronger, enforceable rules and sustained media attention. He says the Australian Insurance Council’s role in drafting industry guidelines creates a conflict, and that regulators should be willing to impose meaningful penalties.

He recommends the Australian Financial Complaints Authority as a free avenue for resolving disputes, while noting that the process can be lengthy.

Insurer assessments

Based on his own casework, Dugdell names Auto & General, Budget Direct, Qantas Insurance and Coles Insurance as brands associated with serious problems in claims he has handled. He also raises concerns about QBE’s use of loss adjusters.

These are Dugdell’s assessments, not an independent ranking. He describes Suncorp and IAG as better performers in his experience, while acknowledging that they also make mistakes.

Presenters and contributors

• Karl Stefanovic — Host
• Luke Dugdell — Claims Hero