AFCA Upholds Insurer's Premium Increase Amid Consumer Complaint

1

Allianz defended its position, citing that it had communicated with the homeowner according to her specified preference by sending renewal documents to her property. These documents, sent in 2022 and 2023, were not returned or marked undelivered. Despite receiving all pertinent documents between 2016 and 2021, the policyholder could not find written notification regarding the recent premium hike and suggested this might be due to postal issues at her multi-unit residence. She argued that additional notifications could have been sent via registered mail or email.

The insurance company justified the increased premiums by explaining that a reassessment had categorised the homeowner's property as being in an "extreme flood risk zone," which impacted the premium costs. While the homeowner referenced a local council's assessment classifying the location as low flood risk, AFCA determined that an email exchange from March 2020 between her builder and the council did not suffice for evaluating the flood risk.

AFCA noted that the complainant was given the option to provide her own flood risk assessment, either with an independent hydrologist or from a relevant authority, but chose not to do so. The authority concluded that the insurer had fulfilled its duties by sending all necessary documents and deemed it reasonable for the policyholder to be aware of the premium changes.

According to AFCA, the complainant was responsible for reviewing the policy documentation and monitoring the direct debit transactions. If dissatisfied, she should have contacted Allianz at the time of renewal or explored alternative coverage options. The delay of 19 months before addressing the issue did not support her case.

This ruling underscores the importance of consumers actively monitoring insurance communications and being aware of their policy details, especially after premium adjustments based on risk reassessments. It highlights the principles of consumer responsibility in financial management, particularly in the complex realm of insurance.

The decision may encourage insurers to review and possibly enhance their notification processes to mitigate similar disputes. For consumers, this serves as a prompt to diligently review insurance documentation and address any concerns promptly with their insurers. Additionally, property owners in high-risk areas may want to proactively engage expert assessment to ensure their risk categories are accurate and justified.

Published:Monday, 1st Sep 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

NM Insurance Secures Growth with Five-Year Zurich Partnership

05 Sep 2025: Paige Estritori

In a strategic move set to bolster its market position, NM Insurance has announced a five-year agreement with capacity provider Zurich, positioning itself for further growth and increased broker confidence in its success. Since its establishment two decades ago as Nautilus Marine Insurance Agency, NM Insurance has expanded its focus beyond the recreational boat market in Australia, branching into New Zealand and diversifying into the commercial marine, caravan, and motorcycle sectors. - read more

Empower Your Cyber Knowledge with CFC's Free Masterclass

03 Sep 2025: Paige Estritori

In an era where cyber threats are increasingly sophisticated, CFC Underwriting Limited has unveiled a unique opportunity for brokers to fortify their expertise through its newly launched Cyber Masterclass. This initiative offers a flexible, on-demand video learning series designed to advance brokers into proficient cyber insurance specialists at their convenience. - read more

NSW Revisits CTP and Lifetime Care Schemes

02 Sep 2025: Paige Estritori

New South Wales (NSW) is undertaking a detailed review of its Compulsory Third Party (CTP) insurance scheme as well as its lifetime care and support system. The Standing Committee on Law and Justice of the state's upper house has initiated this examination as part of their routine practice conducted every parliamentary term. The last thorough assessment took place in 2022. - read more

AFCA Upholds Insurer's Premium Increase Amid Consumer Complaint

01 Sep 2025: Paige Estritori

A recent decision by the Australian Financial Complaints Authority (AFCA) has ruled against a homeowner seeking an $18,000 refund from Allianz. The homeowner claimed that the insurer failed to adequately inform her about substantial increases in her optional flood cover premiums. Initially, her monthly payments surged from $369 to $1277 in August 2022, a change she only noticed in March of the following year through her bank statements. - read more

Rising Group Premiums Pose Challenges for Australian Life Insurance

28 Aug 2025: Paige Estritori

Insurance premiums for group life policies with long-term benefits have surged between 15% to 25% on average in the first half of the year, according to a mid-year market update from Marsh Australia. While the steepest increases affected those with adverse claims experiences, short-term rates and premiums for permanent disabilities remained relatively steady. The sector has also become more selective, with insurers adopting stricter underwriting standards, particularly eschewing high-risk industries. - read more

Concerns Arise Over Construction Code Pause Amid Housing Push

28 Aug 2025: Paige Estritori

The federal government's initiative to accelerate housing development by relaxing certain building regulations has raised alarm within the insurance sector. Housing Minister Clare O’Neil announced changes on social media, indicating a strategic pause on parts of the National Construction Code to expedite building approvals and encourage the construction of much-needed homes across Australia. This move comes in response to challenges in the approval process, which often delays construction. - read more

RACQ Insurance Ordered to Increase Payout After Claim Handling Flaws

27 Aug 2025: Paige Estritori

RACQ Insurance has been instructed to bolster a payout to a customer following a ruling by the Australian Financial Complaints Authority (AFCA). The dispute arose after the insurer's handling of a house fire claim lodged by a woman in October 2023 was found lacking. The fire, initiated by scented candles, resulted in significant fire and smoke damage to her home. - read more

ASIC Review Puts Life Insurance Sector Under Scrutiny

26 Aug 2025: Paige Estritori

The Australian Securities and Investments Commission (ASIC) has spotlighted significant shortcomings in the direct sale of life insurance products, urging the industry to reassess its sales practices. The recent review unearthed ongoing issues with remuneration structures, indicating that some insurers still link commissions to sales targets, potentially fostering aggressive sales tactics. The study further revealed a troubling rise in claims disputes, with reported cases more than doubling since 2018, raising concerns about the transparency and trustworthiness of these policies. - read more

Ombudsman Sides with Insurer on Imposed Excess Dispute

25 Aug 2025: Paige Estritori

A recent ruling by the Australian Financial Complaints Authority (AFCA) has upheld an insurer's decision to impose an additional $2000 excess on a property policy, following a dispute raised by a policyholder over claims history impacts. - read more

AFCA Rules on Disputed Car Insurance Payout

22 Aug 2025: Paige Estritori

The Australian Financial Complaints Authority (AFCA) has decided against a man's claim for a car insurance payout, which he pursued following a dispute with his ex-wife. The issue arose when the man's Toyota Landcruiser was involved in an accident in April, prompting him to file for a cash settlement of $55,950. However, the ex-wife, who held the insurance policy, later blocked his access to the payout. - read more

Click for more Insurance News