Financial Services Complaints Limited (FSCL) has closed an investigation into an insurance dispute involving a small business owner affected by Cyclone Gabrielle.
The business owner, referred to as Patricia, raised several issues related to her insurer’s response after her business was significantly disrupted by flooding in February 2023. The claim involved coverage for both material damage and business interruption.
Patricia reported delays, insufficient updates, and what she perceived as inadequate compensation for her Claims Preparation Cost (CPC) claim.
Her insurer paid $58,000 for her primary claims, but she raised concerns over communication gaps, perceived delays in the claims process, and the CPC payment offer of $1,230.
Patricia also alleged that the insurer’s special investigations team acted aggressively.
Following an internal review, the insurer acknowledged certain procedural issues and issued an apology alongside a $10,000 settlement offer. Patricia rejected this offer, amending the agreement herself to request $100,000, explaining that the adjustment was intended to test the insurer’s attention to detail.
After reviewing the complaint, FSCL concluded that the insurer’s offer of $10,000 was reasonable given the circumstances, which included a surge in claims across the region due to the cyclone.
It found the insurer’s timeline to be within acceptable limits, noting that Patricia’s primary claims were processed within three months – a timeframe FSCL deemed fair given the increased volume of weather-related claims in early 2023.
Although one communication update exceeded the Fair Insurance Code’s timeframe by two days, FSCL considered this a minor infraction.
The financial ombudsman service also investigated Patricia’s concerns about the use of a loss adjuster, which she felt complicated her ability to stay informed on her claim’s status. While FSCL recommended that the insurer work to improve communication clarity through adjusters, it found no evidence supporting Patricia’s allegation that she was mistreated by the insurer’s special investigations team.
In terms of the CPC payment, FSCL deemed the $1,230 offer adequate based on the evidence. It further noted that the additional $10,000 compensation would cover any remaining discrepancies.
FSCL informed Patricia that it would close the investigation, as further action was unlikely to increase the compensation awarded.
However, Patricia declined the $10,000 offer and continued to raise new issues.
