In the wake of the devastating 2022 flood event, a federal inquiry into insurers’ responses has made dozens of recommendations to correct failures within the system.
ARC Justice, a local legal support organisation in Shepparton and Bendigo, is calling for all 86 recommendations to be adopted and implemented.
Fourteen of the recommendations were shaped in part by input from ARC Justice, according to the group.
“We’re pleased to see our contributions, which focused on the real-life experiences of people in our communities and proposed practical and common-sense changes to the system, so thoroughly reflected in the report,” ARC Justice chief executive Damian Stock said.
ARC Justice made submissions in writing during the inquiry, as well as giving oral evidence.
Some of the recommendations in line with the organisation’s suggested reforms include providing a single contact point within insurance groups to manage individual claims, introducing an independent panel of experts to objectively assess damage, requiring insurers to provide clear advice on rights and risks relating to cash settlements, and mandating referral to community legal services when a cash settlement is being considered.
The final inquiry report revealed key issues and failures within the insurance industry following the 2022 floods, which resulted in more than 300,000 claims being lodged nationwide.
Mr Stock said the report underscored the need for insurers to improve transparency and accountability in their dealings with flood-affected communities.
“Many of these recommendations reflect the experiences of our clients,” Mr Stock said.
“Our call for insurers to be physically present in disaster recovery hubs and improve communication with claimants has been addressed.
“These reforms are essential to ensuring that policyholders receive the support they deserve during these difficult times.”
Some community members in Greater Shepparton, and the surrounding areas, continue to struggle with the fallout from the disaster, which submerged a large portion of the region.
Some are still unable to return home two years after the flood event.
The evidence received during the inquiry showed that many people experienced delays in communication and some ended up involved in lengthy, legalistic disputes with insurers.
One recommendation from the parliamentary report would require insurers to speed up their response times.
Tardy insurers would be required to respond to a flood insurance claim within a year.
The House of Representatives report recommended that insurers be required to make a decision on whether to accept or deny a claim within 12 months, and if that did not occur, that they be required to accept the claims in full.
Some flood-affected residents complained to the committee inquiry that insurers were delaying a decision on coverage.
Committee chair Daniel Mulino said the title, Flood failure to future fairness, reflected “the collective failure by insurers to meet their obligations to policyholders after the 2022 floods, and our hope for a fairer system in the future through the 86 recommendations in this report”.
Dr Mulino said “too many cases were badly mishandled”.
“Inconsistent decision-making meant neighbours received different outcomes after the same event,” he said.
“Long delays caused emotional, mental health and financial strain. More than two years on, many people still can’t go home.
“Initial offers were often too low, which was especially problematic for cash settlements.”
Moving forward, ARC Justice will work with other consumer advocacy organisations, legal rights groups and the community to make sure the insurance industry and different levels of government understand the urgency of adopting the parliamentary recommendations, according to Mr Stock.
“The next disaster is inevitable, and communities are more vulnerable now, facing under-insurance and the trauma of recent years. Urgent reform is essential to protect them,” he said.