Domestic violence victim 'removed from policy without consent'

A complainant who was not informed by RAA Insurance that it had removed her name in a comprehensive motor policy she held jointly with her ex-partner has won her dispute with the insurer.

The Australian Financial Complaints Authority (AFCA) ruled the insurer did not follow its internal processes or terms of the policy, thereby causing her “an unusual degree of physical stress and inconvenience” given that she had been in an abusive relationship and broke up with him.

In her complaint to AFCA, the woman says the insurer failed to protect her interests as a vulnerable person despite being aware of her situation and that the couple had separated.

An extract of the insurer’s policy reproduced in the AFCA ruling states “if more than one person is named as the insured on the Certificate of Insurance, each person is a joint policyholder and is able to make any changes to the policy other than remove another insured”.

AFCA says internal policy documents provided by RAA Insurance show that an insured cannot remove another insured from a joint policy unless the insurer speaks to the other insured directly.

AFCA also determined the insurer breached the complainant’s privacy by sharing her personal information with her ex-partner even when it knew about the nature of the abusive relationship.

The external dispute-handling body ordered RAA Insurance to pay the complainant $5400 for non-financial loss, the maximum allowed under its remit. The insurer is to also issue a formal written apology to her, acknowledging its service issues.

“The insurer does not dispute that its conduct has impacted on the complainant,” AFCA said. “I accept that the insurer’s conduct has led the complainant to feel stressed, vulnerable and at risk.

“The complainant has explained that as a victim of domestic violence, she is extremely concerned for her safety whilst at the same time, concerned to protect her financial interests.”

According to details in the AFCA ruling, the ex-partner called the insurer on July 21 2020 and informed one of the representatives who took his call that the two parties had separated.

The ex-partner went on to note that the policy for the Ford Ranger vehicle was in joint names and that he wanted to transfer the policy into his name. The insurer did not query this or notify the complainant of the request.

The representative informed the ex-partner that the only person who could take themselves off the policy is the insured person. However, the representative noted that that was not a problem because the policy renewed on July 25 2020.

The representative allowed the policy to lapse even though the policy would automatically renew given the woman was paying the policy by monthly direct credit.

RAA Insurance had offered an ex-gratia payment of $5000 to the woman and placed an alert on the ex-partner’s policy.

But the woman rejected the settlement offer and in August last year made a counter-offer, asking for among other things, $5400 for non-financial loss and $25,000 that she says represents half the value of the vehicle.

She also wants the insurer to refund premiums paid on all other joint policies.

While awarding the non-financial loss compensation, AFCA says financial matters relating to jointly-held property are best handled by a court.

Click here for the ruling.