News

CLAIM STRESS OUTWEIGHS DISASTER

News >>

New research has revealed that dealing with an insurer after a catastrophe can be more stressful for policyholders than the event that caused losses in the first place.

Kelly Dixon, from QUT’s School of Psychology and Counselling, studied the mental health impacts caused by the flood disasters in Brisbane in 2011 and Mackay in 2008, producing some interesting incentives for policyholders to utilise the help of a professional broker when dealing with insurers.

The study shows that, while the flooding event was stressful on the day, the most trying part of the experience for many people was the aftermath, including dealing with insurance companies and the re-building process.

“The findings showed that aftermath stress contributed to poor mental health outcomes over and above the flood itself, prior mental health issues and demographic factors,” Dixon says.

“Aftermath stress was the strongest predictor of post-traumatic stress symptoms with 75 per cent of people saying the most difficult aspect was the aftermath and dealing with insurance companies.”

Policyholders who had difficulty with insurance claim processes following the disaster event were more likely to describe the aftermath period as extremely stressful.

The biggest stressors were correlated with insurer staff giving inconsistent information, delays in claim assessment, underinsurance and inadequate compensation.

Commenting on the results of this study, Professor Allan Manning recommends insurers must put themselves in the position of the policyholder when dealing with post-disaster claims.

“This means regular contact, prompt progress payments and making sure that all the trades turn up when they ought and do the proper thing by the insured,” Manning wrote.

by Cecilia Harris, NIBA Broker Buzz

Last changed: May 27 2015 at 1:40 PM

Comments

  1. None Found

Add Comment

Latest News

D&O premium pool ‘must treble’ to return to profitability

A new report – called "Show Me The Money!" by insurer XL Catlin and law firm Wotton + Kearney – is the second in a series of three white papers on securities class actions and their impact on the Directors & Officers Liability (D&O) market. The main conclusion is that Directors’ and officers’ (D&O) insurance premiums are under-priced significantly and need to rise strongly to restore profitability. The main risk areas are those exposed to securities class actions, 

It says Directors & Officer's Side A, Side B and Side C cover has been chronically underpriced since at least 2011, while the frequency of class actions is increasing as more plaintiff lawyers and litigation funders enter the space.

The analysis suggests last year’s overall premium pool of about $210 million would need to increase by at least three times to establish a profitable market, if it is assumed all other factors stay unchanged.

“Recent market developments would indicate most D&O insurers are now endeavouring to restore some semblance of profitability to their portfolios after years of market losses,” the report says.

read more

75% of Cyclone Debbie claims settled

In the 6 months since Cyclone Debbie devastated Queensland and parts of northern New South Wales:

• more than 31,000 homes and business have been repaired or received settlements from their insurance company

• more than 20,000 families have had possessions replaced

• more than 4,500 motor vehicles have been repaired or new vehicles provided

• hundreds of local builders and trades have been working on properties to repair the damage and destruction caused by the cyclone

• over $5 million has been paid EACH DAY to assist local communities, residents and businesses.

read more