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Insurance rip-offs: Consumers warned to check fine print to avoid claims being rejected

INSURANCE companies are refusing to pay out thousands of claims for theft, car crashes and home damage each year.

Unfair knock-backs and confusing conditions and exclusions are leaving policyholders out of pocket, consumer experts say.

Almost 100,000 general insurance claims are rejected annually, latest industry figures show.

Insurance Law Service solicitor Alexandra Kelly urged consumers not to forget to disclose information such as claims history, especially when switching insurers.

Internal disputes lodged with firms offering car, home, travel, accident, pet and other insurance soared 10 per cent to almost 32,000 in 2012-13.

Most gripes related to claims. Pakenham man David Reece battled to get a $1000 travel insurance claim for lost baggage left at a hotel when he and his wife fled a Philippines earthquake last year.

“They said I needed receipts or photographs,” he said.

“I was also told I should have made a police report, yet police were killed or pulling bodies from the rubble and ­trying to keep  public order.”

Insurance Council of Australia executive director Rob Whelan defended the industry, ­saying 97 per cent of lodged claims were paid.

“Each working day, insurers pay out $111 million in ­insurance claims,” he said.

Companies said declined claims reporting had improved, leading to a rise in ­recorded figures.

But Consumer Action Law Centre policy director Denise Boyd said it was hard to challenge insurers because the sector was exempt from Australian Consumer Law unfair contract term protections.

“The industry is a protected species that hides all sorts of exclusions in contracts that are difficult to find, read and understand,” Ms Boyd said.

A MOTORIST fined for driving an unregistered car because an assessor failed to advise that the vehicle was a write-off as it was uneconomical to repair.

AN aged pensioner forced to fight to get a $56,000 travel insurance claim honoured despite medical clearance for a cruise and paying a higher premium for a pre-existing condition.

A HONEYMOONER denied a wallet theft claim even though the culprit was caught on camera and apprehended with her empty bag. The “unsupervised” bag was snatched from beneath her seat.

A MAN accused of torching his car while intoxicated. Credit card statements revealed he was at another location buying fast food at the time of the fire.

A SINGLE mother ordered to pay a higher $3000 excess after an accident despite disclosing her previous claims and licence suspension history to a car dealer who arranged her insurance.

Published September 15, 2014 by KAREN COLLIER – HERALD SUN

karen.collier@news.com.au