What options are available if you’re under insured? If you find out you don’t have enough cover to rebuild or repair?
Learn about the 3 key policy sections to know in your insurance policy, and what scope you may have to access extra funds.
What you’re about to learn in this video is going to be super helpful as you understand more about the assessment process and the specific things to be aware of.
In this interview, I speak with David Keane from Solve My Claim.
David Keane has been in the insurance industry for over 24 years now, and he created Solve My Claim to help and assist homeowners navigate their insurance claims and disputes.
In the last three years alone, Solve My Claim has helped homeowners secure more than $35 million in additional insurance claim settlements.
So let’s dive in.
Amelia Lee + David Keane (Solve My Claim)
[Amelia Lee] In terms of …if you know that your insurance policy isn’t enough for the damage.
If you’ve realised, okay, for example, you’ve had total loss with these fires. You built before, perhaps the BAL ratings came through your area, you know, that whatever you’re going to rebuild is going to need to measure up to a whole new standard of construction, and it’s going to cost more than what you had currently insured for.
You talked a little bit before about additional benefits. What’s your scope with this in terms of, seeing that under insured amount?
[David Keane] Yeah, it really depends on the policy and this is, I guess, a preface to my answer is, one thing that I do come across many times is people actually having no idea what they’re insured for. And no idea what their policy says.
And what constantly amazes me is, that we can spend a million dollars on a home and then try and save $50 on the insurance and without even looking at what we’re actually foregoing.
So with that preface, it’s so interesting to see the difference in the benefits that policies offer.
And so generally, most people look at an insurance PDS and their eyes glaze over because it’s 100 pages, and they say, ‘Oh I’m not going to read 100 pages, but you actually don’t really need to.’
A lot of that is stuff that is not critical. And there are critical areas that everybody must read in their policy, even if you’re not going to read the full thing.
Now, one of those is a section that will usually be entitled “Additional Benefits” or something similar. It’ll usually be found just after, there’s a section saying what events are covered what type of loss events are covered, and after that, you’ll see the Additional Benefits. In that section, some policies will cover for example, when a catastrophe has been declared.
And what they mean by that is by the insurance council not necessarily by the government, but the insurance council has certain parameters where they declare an event to be a catastrophe event. The bushfires absolutely are. Several of the hail storms that have hit various parts of the country recently have been declared catastrophe events. Many normal storms aren’t.
So if something’s declared a catastrophe, some policies will cover you maybe an additional 10%, 20% over and above your sum insured.
If it’s a total loss and the sum insured is not adequate, there are some areas that, and I should say, in the Additional Benefits, when you look at that section there’s usually a speil straight under the heading and it’ll tell you whether these benefits are in addition to your sum insured, or included in the sum insured. That’s a critical factor. Some policies will cover for example 10% over and above your sum insured for demolition and removal of debris.
Now, a good insurance company should tell you that right up front and should say, ‘okay you’ve insured for $400,000 but you’ve also got $40,000 for demolition and removal of debris’. I’ve seen cases where some companies haven’t told you that. And if you don’t know, you’ve missed out on $40,000 that you’re entitled to.
Some also cover additional, the one particular benefit that’s in many of those policies says that, any statutory or regulatory requirements in respect to compliance, upgrades, building code in NCC, (National Construction Code they call it now), which includes things like bushfire, attack level the BAL Ratings. It includes things in Queensland for example, like cyclones ratings. There’s all sorts of changes to the National Construction Code every couple of years. And homeowners are not required to continually upgrade the house every two years for obvious reasons. And so most homes are not compliant right now with today’s National Construction Code.
This is a big issue in the bushfire areas because many of those homes were built before, as you pointed out, the bushfire attack level assessments and standards were introduced.
And so rather than people’s rebuild cost being less than their sum insured in this event we’re finding many have nowhere near enough sum insured in policy to cover what the rebuilds going to cost. And that can be even a bigger problem. It can be incredibly annoying if the insurance company goes to pay you at less than your sum insured.
But if you can rebuild the house for that, then at least you can probably live with that and move on. If you’ve only got 50% covered, and it’s going to cost you twice as much to rebuild that, that can be catastrophic for people.
And so it’s critical, I would say probably the two biggest sections in your policy you must know intimately well, is what events are you covered for? What additional benefits does your policy cover you for? And what specific exclusions are listed in your policy that if you don’t at least read those three sections, then you really you’re setting yourself up for a massive fall.
[Amelia Lee] Yes, that’s great advice.
I know that the whole issue around when we went through The Gap storms was this whole thing about what was a ‘storm created opening’ versus what was, you know, because if it wasn’t a storm created opening, then it wasn’t going to be covered.
And so it was this kind of whole game of semantics of where the tree fell on roof versus where the water that poured in the hole created by the tree poured through the floorboards into the garage below and destroyed tools, that apparently wasn’t going to be covered.
And you’re right people get those PDS’s and the big unwieldy documents that are just seem full of jargon that nobody understands. But it’s great that you pointed out those specific sections to pay attention to.
[David Keane] Yes, and I think that you mentioned the storm created openings, that’s probably one of the big ones that we argue quite a lot.
Because in essence what that means is, unless the storm has caused an opening to your property, then you won’t be covered for resultant damage. So generally, the insurance policy won’t cover you for the cause. So let’s take the storm as an example, let’s say it maybe you’ve got an old roof has a bit of rust on there a few little maintenance issues like most roofs would have, and then a storm comes and water comes in.
Generally, you’d be covered for the resulting water damage, but you’ve got to fix your roof. Unless you’re dealing with a cyclone where the strong winds have lifted the roof therefore the roof is now part of the result damage. So your policy only covers you for resultant damage.
But depending what that cause is, if they deem that the proximate cause or the dominant cause factor is the condition of your roof, rather than that storm, they’ll also deny the resultant damage.
And so an argument we have with insurance companies all the time is, what was the proximate cause. Taking the bushfire example, you know, I talked before about fire is covered as long as it’s fine.
Now, the insurance companies can use semantics … but we can as well. Because unless in my view, unless that policy says, that there has to have been flame at your property, then we can say, well, there was flame. There was flame.
Maybe the flame didn’t damage the property, but the fire damage is covered where there was flame.
And so a lot of this is an argument in semantics and unfortunately for the average consumer, it’s not something that they’ve dealt with before. And even when they try and get through the dispute process with the insurance company or with the Ombudsman AFCA, they’ll try and argue on the basis of their emotional reasoning … ‘This is unfair, I’ve been with the company for 20 years’, and that’s not going to win your dispute.
The dispute is going to be won or lost on the terms of the PDS. And so yes, there are many cases. I was just actually reading the AFCA figures that they just put out for 2019 disputes. And for many of the insurance companies, by the time those disputes went right through to the AFCA, the Ombudsman panel, something like 75% were deemed in favour of the insurance company.
Now when we go to AFCA, we’re winning, or we’re having decisions in the favour of the client at well over 70 or 80% of the time. And the only difference there is the basis of the argument. And so it’s one of my little bugbears.
I’m often told by insurance companies and by AFCA, ‘Well, people shouldn’t need a consultant ‘to come and run that process for them ‘or an advocate to run that process for them ‘because it’s a free service.’ And it is a free service, but there is such a disparity in the knowledge base of the two parties.
So it’s like you defending yourself in a Supreme Court criminal case without having any knowledge about legal system. Yes – possibly you can win, but really, you’re going to get completely trounced a good defence lawyer most of the time or a good prosecutor most of the time.
And that I guess that’s my concern for people is that they’re expected to know all of these things and to respond at the level of the insurance company without having that knowledge.
[Amelia Lee] Yeah, this is why I’m just so glad to be able to introduce you to the UA Community. Because if Solve My Claim had existed when we were going through, you know, our situation … I know that we were very fortunate that we managed to find a forensic engineer who lived locally.nHe was a man that was in his 80s. And he was just passionate about helping us level the playing field basically. So he helped us navigate and understand it.
And because as an architect, I’ve often argued town planning law and gone ‘Okay, well, if we’re going to object a development application, we have to do it with the rules of the town planning and actually go through it.’ So I had that framework in mind to then look at okay, let’s look at the insurance policy and how do we use the insurance policy to argue FOR what we’re asking for rather than them using it against what we’ve asked for.
But that was … it was this roller coaster of being worn down and us – just my husband and I just being stubborn and being supported as well by the people around us.
So I think that for Solve My Claim to exist and be able to help people navigate what is something that is just such a bottomless well of kind of information and knowledge,I think is so needed. So it’s just brilliant.
[David Keane] Yes the last straw for me was the 2011 Brisbane floods. I was at the time assessing, I was subcontracting to one of the major assessment companies who had a contract from one of the major insurance companies. I’ll leave names out of it.
We had something like 1,000 claims to assess – the team that I was leading. We knew that all those claims will be denied because flood wasn’t covered. We weren’t allowed to tell the people that would be denied. We had to say they are still being established and we need to do the assessment and go through the process to ensure that the insurance company had the info they needed for any claims that were disputed down the track.
But I was going into homes, home after home, knowing that these people’s lives are about to be completely overturned. And they’ve already had the trauma of the flood. And now they got the trauma of not knowing yet, but soon to find out that the $200,000 worth of damage wouldn’t be covered.
And there’s one couple in particular, was an old couple and he had Alzheimer’s, so he’d gone into a nursing home really gone downhill and so his wife had brought him back home to live the last few months of his life, and then weeks later floods hit. And he was just sitting there and he was just so confused. He didn’t know where he was, or, you know, and it was just seeing that human toll.
And I just, I’d already for many years felt really uncomfortable with a lot of what I’d seen either throughout my involvement in the industry. And I just thought someone’s got to stand up for the little guy, somebody’s got to jump the fence and start applying their expertise for the consumer.
And the following year was when we first looked at Solve My Claim and started putting it in place. And yes, it’s very rewarding to know that you can come in and change people’s lives because we really are, we’re dealing with, you know, in many cases, hundreds of thousands of dollars worth of damage. If we lose this case, then these people’s lives are never going to be the same. The next 20 years, there’re just going to be recovering from this loss. And if we can actually get the decision overturned.
And we don’t just try for anything … like if you’re covered, you’re covered, if you’re not, we can’t change the facts to make it that you are. But at least people get an impartial and independent view on yes, what they saying is actually correct in this case, and I find that people can, even in those few instances where we can’t help someone, at least they can reconcile a bit more than, ‘Okay, I’ve heard this from a trusted source. It’s not just the insurance company giving me spin’ and they can get on with life.
[Amelia Lee] It actually then empowers you to know that you took some control back as well to you know, in a situation where you would feel completely out of control.
THIS IS PART 4 OF MY INTERVIEW WITH DAVID KEANE, SOLVE MY CLAIM.
This interview is part of our Rebuild + Build Better series.
Be sure to stay tuned as we share more information and expertise in helping you rebuild after bushfires, or build homes more resilient to climate conditions and in bushfire prone areas.
Resources mentioned in this video:
Get in touch with David Keane, Solve My Claim, here >>> https://solvemyclaim.com.au/
Or check them out on Facebook here >>> https://www.facebook.com/solvemyclaim