Question: What length of time is reasonable for an insurer to make a decision about a simple claim? On 2 April, our car was involved in a traffic accident and was undriveable. Roadside assistance arranged for a towing company to take it to their yard. We lodged the incident and a claim with our insurer TIO within two hours. We were told by TIO there was no need to make a police report.
In the following week we filled out a comprehensive TIO form as per their request. On 6 April TIO said they had requested photos from the towing company to ascertain the damage and work out whether to write the car off or repair it. All was as expected up to this point. After that I contacted TIO every week for an update and was informed that it was proceeding.
Fourteen days later, on 20 April, we were suddenly asked to make a police report by the TIO claims officer. We did that immediately and some time after 22 April the car was delivered to a local smash repairer. After one more week I called the smash repair place only to be told they were waiting for a TIO-appointed assessor to come and take yet more photos and make a report.
On 4 May, I called the smash repair place again. Apparently TIO had just received the report but had told the repairer it would take yet another five to 14 days to make a decision about this car. So, it will be approximately six weeks from the time of the accident until TIO instructs the repairer to proceed
or not! This is before it even begins to be repaired! Is there something in consumer rights legislation about timely delivery of a service? What are my options?
Answer: Under the Australian Consumer Law services must be supplied within a reasonable time, however insurance contracts are excluded from this provision, as different laws apply. The General Insurance Code of Conduct provides timeframes for insurers to work to when managing claims.
Within 10 business days of receipt of your claim, the insurer must decide whether further information, investigation or assessment is required, and if so, they must notify you of what information is required, if a loss adjuster/assessor needs to be appointed, and an estimate of the
time it will take to reach a decision.
Routine requests about your claim must be responded to within 10 business days. They must keep you informed on the progress of your claim at least every 20 business days. If they decide to appoint a loss adjuster/assessor or investigator they must notify you within five business days. Once the insurer has all the relevant information, having completed all their enquiries, they have 10 business days to accept or deny a claim and inform you of their decision.
In cases where further assessment or investigation was required, and provided there are no exceptional circumstances, under the code the insurer has to make a decision on the claim within four months of its receipt. However, a complaint can be raised prior to that if you feel there has been an unjustified delay and/or if you feel the insurer has failed to comply with the other timeframes of the code.
Your first step could be to go through the internal dispute resolution (IDR) process. You could
lodge a complaint with TIO and advise that you believe that the assessment and repair is taking
an unreasonable amount of time to complete and you would like this process sped up if possible. If this doesn’t work out, your next step could be to lodge a formal complaint with the Australian
Financial Complaints Authority at afca.org.au or on 1800 931 678.
