Insurance & Savings Ombudsman – what we do

Insurance & Savings Ombudsman – what we do

Cantabrians must be the world’s most insurance-savvy people. More than 1000 days have passed since the region was shaken by its first large earthquake in modern history. The scale of the disaster and its effect on the insurance industry in New Zealand was unprecedented.

Many locals have become experts at reading and interpreting their insurance policies.

Even so, there are some vulnerable consumers, who don’t know where to turn for help to resolve their complaints. “It’s time”, says the Insurance & Savings Ombudsman Karen Stevens, “for consumers to be reminded about their options if they want to refer a complaint to a free and independent dispute resolution scheme”.

The Insurance & Savings Ombudsman Scheme (ISO Scheme) is an approved dispute resolution scheme that can deal with insurance claims about its members. It has handled more than 1000 complaints enquiries from Cantabrians since 4 September 2010. It employs 13 case managers who have a mixture of legal and insurance expertise.

The ISO Scheme may be able to help in the case of delays in getting a decision on a claim, or where consumers disagree with the settlements being offered. It can also look at complaints about claims that have been partially or completely declined.

"It is a real challenge to make sure that all consumers with complaints know about the ISO Scheme. We want to assist where possible,” says Stevens.

“We get a range of complaints, but the most common are about: quantifying claims, insurers’ decisions to build or repair, what “replacement” means - especially in relation to materials, small business interruption claims, availability of cover, and loss of rents issues,” says Stevens.

Many complaints have been resolved with information and don’t need to go through the formal dispute resolution process.

“To bring a complaint to the ISO Scheme, consumers must first go through their insurer’s internal dispute resolution process,” says Stevens. If this doesn’t solve the issue, the policyholder can ask their insurer to confirm in writing that “deadlock” has been reached. That means the complaint is ready for the consumer to bring to the ISO Scheme.

When the ISO Scheme receives a complaint it checks it has jurisdiction, then contacts the insurer to get a copy of the entire claim file for review. The complaint is allocated to a case manager who will contact both parties to discuss the complaint, review the information and make independent enquiries – such as asking for advice from an expert.

The case manager then attempts to resolve the dispute using negotiation, conciliation, or informal mediation. If this doesn’t work the ISO Scheme will make a decision.

“Some consumers aren’t aware that making a complaint to the ISO Scheme is free and they don’t need to attend in person or pay for a lawyer”, says Stevens.

The insurer is bound by the ISO Scheme’s decision, but a consumer is not. If consumers are unhappy with the outcome they can still take their case to court – although this can be an expensive process, which doesn’t guarantee success.

If the insurance company doesn’t agree with the ISO Scheme’s decision, it can request a review. However, the ISO Scheme’s final decisions are binding on the insurer.

Some of the most common recurring Christchurch earthquakes-related issues handled by the ISO Scheme include:

• a lack of, or confusing, information

• lapsed or cancelled policies

• policies not read/not understood/not explained

• policy entitlement for temporary accommodation

• scope of work

• policy interpretation

• rebuild or repair

Finally, more information about the ISO Scheme complaints process can be found under Making a Complaint on its website www.iombudsman.org.nz

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