ASIC sues Hollard over claims handling failure | Australian Markets

Hollard Insurance is being sued by the Australian Securities and Investments Commission over allegations of critical claims handling failures, together with taking practically three years to resolve an difficulty.

ASIC says it has initiated motion within the Federal Court alleging Hollard breached its obligation of utmost good religion in handling of the home building and contents insurance coverage declare made by a couple in regional Victoria.

The insurance coverage declare was made on 31 October 2021, two days after a main storm broken the roof of their home, however the couple had been made to attend 18 months for his or her declare to be rejected.

Hollard initially accepted the declare, then repeatedly delayed selections about repairs, then took over 9 months to provoke an inspection by a structural engineer and delayed offering short-term lodging to the couple.

Hollard rejected the declare in late April 2023, counting on a non-expert opinion over prior skilled stories on the trigger of the harm. The couple rejected a modest money settlement offer by Hollard and lodged a criticism to the Australian Financial Complaints Authority (AFCA).

ASIC alleges that the mixture of delays in determination making, poor communication and ignoring skilled advice uncovered the couple to pointless and extended hurt, and breached Hollard’s obligation of good religion in handling the declare, as implied by the Insurance Contracts Act.

ASIC Deputy Chair Sarah Court mentioned, “In the end, because of the excessive delays by Hollard and the failure to undertake make-safe works, the home has become so riddled with moisture, mould and decay that it is uninhabitable and now needs to be demolished and rebuilt”.

“The egregious delay highlights ASIC’s concern concerning the vital rise usually insurance coverage complaints reported to AFCA because the 2022 floods, notably these involving declare delays. We are taking this case to ship a clear message that delays of this magnitude should not acceptable and, in our view, are illegal. The penalties of Hollard’s actions have induced vital hurt to the policyholders who stay with out their own home three and a half years later.’

ASIC is looking for declarations and a civil penalty in relation to s 13 of the Insurance Contracts Act.