nathanm
Eats Squid
yep that makes sense. they've always been like that.
How stolen does this look, or a bargain and get on it.
- Thread starter nathanm
- Start date
PJO
in me vL comy
Calvin27
Eats Squid
My AAMI renewal is up in the next month. They sneakily upped the construction cost to over $150k more while simultaneously removing the specified items I had listed in my previous years policy. Looks like you can no longer do this manually online and you have to call them up. I suspect a fair few folks have been putting claims in and they are trying to reduce exposure to this. For me this is a deal breaker, If someone were to rob me, the bikes would be first cab off the rank. Easy to steal, easy to sell, hard to track. Given the price of bikes lately and my extensive collection can't chance it.
yuley95
soft-arse Yuley is on the lifts again
I was already investigating other options and found GIO to be cheaper with seemingly comparable cover. Just as I was getting ready to switch I got my renewal notice from AAMI for my home insurance and they had put the premium up by $400 making my switch even more cost effective. Plus they were c*nts.
In terms of listing specific items, you might want to compare how much it adds to your premium to have the bikes on your home insurance policy vs specific bike insurance.
I went with velosure and it was less per year to have them cover my bike that to have it as a 'portable item' with GIO. Further, velosure cover it at home, in transport, away from home and if damaged in a riding accident which is more than you get having it as part of home insurance.
EDIT - just to be clear, I've not had to make a claim with either GIO or velosure so can't really vouch for them at this stage except in terms of price and theoretical cover.
Squidfayce
Eats Squid
cost of replacing your home increases even through the actual cost of the physical home depreciates. If its covered for less than what it costs to replace when you make a claim (for full rebuild, lik ein the event of a fully burned down home), you don't get the lesser amount, you're considered underinsured and are likely to have the claim declined
LPG
likes thicc birds
There has been a sudden shift in cost of building since Covid and most haven't updated insurance policy to reflect new cost of rebuild. In that case an insurance company could reject a claim all together in the event of losing a house? That would probably mean that 85% of homeowners could have their claim denied if they lost a house for some reason!
You need to have a look at what $/m2 new construction is, add a bit for demolishing the old house if it was burned down for example and work on those numbers rather than what you think it is worth or even what it was worth last year. Our insurance renewals are due and I did some ringing around. One company, a biggie, wanted to match the premium by reducing the value of the contents and house replacement costs. Yeah sounds good. Pricks.
Squidfayce
Eats Squid
yes, they could. Hence why some, the ones that don't want to waste money fighting that exact argument, are increasing the replacement cost. This is an action in good faith, even if it doesn't feel that way. They're doing people a favor because most don't realise that their replacement claim is predicated on a replacement being able to be achieved for the insured amount. Many people are chasing the rock bottom premium cost and many will actively lie about replacement costs.
Many people also forget that before a house can be rebuilt, the old one needs to be demolished and the block leveled again. Some insurers have a % provision in their policy so you dont have to work it out, others expect you to add those costs yourself to replacement cost. I've seen a claim conditionally approved on the proviso the insured party stumped up the demolition cost, as their replacement was approx 20k short of the total. Luckily they had the money.
Flow-Rider
Burner
Does it say that in their PDS's, if not I doubt it could be even challenged in court?
Squidfayce
Eats Squid
I think youll find a PDS isn't the end of a legal argument. It goes a long way to supporting an argument but intent and reasonable tests come into play too.
Calvin27
Eats Squid
Surely can't be true. I was more undr the impression it was sort of like 'agreed value'. Happy to build a smaller house or chip in a bit to get the build done. I don't look at insurance as needing to completely bail me out, I just don't want to be left with a huge hole. Small gaps in policy are a decent trade off given the risk profile.
Genuinely curious, what is the legal argument here? At face value I rekon a judge would laugh if an insurance company said they are not paying out because the replacement cost is higher than the value they agreed. I might be reading it wrong though, is the policy to replace and rebuild the home or just dump money back to the customer? Never really thought about that I just thought you get a wad of cash and you build with that.
Squidfayce
Eats Squid
The way it will be worded is along the lines of that it is a condition of the policy that you are adequately insured for the replacement of xyz.
Adequately is obviously subjective, which is why if you're 20, 40k off whatever, you can probs still get a no argument claim sorted. But what tends to happen is somone may insure a home And sit on the policy for 15 years and never change it. Then their house burns down and their replacement cost is 200k, but you can't build shit for 200k. You haven't met the condition of the policy. Happens more often than you'd think. There could also be other conditions you fail to meet that void the policy too. Eg if you live in a Bush fire risk area and your house hasn't been built or retrofitted to the required BAL level, a claim can be rejected.
You might not look at insurance as needing to completely bail you out, but whoever you have your mortgage with does. Some lenders also require you to provide a yearly certificate of currency showing the value you're insured for.
Squidfayce
Eats Squid
Most people cant aford to fight an insurance company in court. You get the apeals/ombudsman process - which can take months. If its found in favour of the insurer, your next hurdle is getting it to court.
The no win, no fee lawyers won't take something they can't 100% win (remember the ombudsperson found in favour of insurer, which is a redflag for the lawyers to walk away). So this means you need to front up cash to litigate. Given you're sans house, have a bank breathing down your neck for mortgage payments, possibly also paying rent somewhere, often the only option is to cut your losses.
So getting a judge to potentially laugh at anything is a pretty hefty exercise.
Squidfayce
Eats Squid
Here's *some* of the relevant wording from a youi PDS. There more in the various PDS' of insurers, but the rest of it is for you to investigate.
Calvin27
Eats Squid
Doesn't say anything about not insuring or paying out. Worst outcome by my reading of that is that insurance pays out what the insured value is and then you are shortchanged (as opposed to not paying anything at all). Insurance policies don't work like that and yeah you are right they might drag it through courts etc, but I'd be surprised if this would hold up.
In a legal sense, generally there are three reasons policies get denied. First is obviously policy exclusions - self explanatory. Second is non disclosure (i.e. that couple that got denied because they ran a 'business' from their home - they did in fact win their cse eventually, possibly more due to public pressure). This wouldn't fall into that category though as it generalyl needs to affect he risk. You could argue the property value is a risk factor (i.e. need to pay out more) but in that case the legal ruling is unlikely that the policy is void and the onus is on the insurer to set reasonable limits on what is covered. For example the buyer can choose to increase or decrease the replacement value, but only within defined limits. The third is conditions and responsibilities. I can't see anything in the Youi policy that would trigger this, and even then a change in value is not something that consumer law would consider a reasonable reason to void a contract.
SummitFever
Eats Squid
There is a well established common law (eg. Aust and the Poms) legal principle that terms in an agreement (like what appear in the PDS) will be construed "contra proferentum" - basically against the party that seeks to "profit". What this means is that while an insurance company will be able to use under insurance as a limit on their liability they will not be able to use it as a way to avoid paying out at all.
The bargain between the two parties is complete. The insured has nominated a "value" and based on that value the insurer has calculated the premium. This is just your common run of the mill commercial agreement.
@Squidfayce You'll really need to back up your assertions here with some specific Australian legal precedent. Case law or it didn't happen.
The bargain between the two parties is complete. The insured has nominated a "value" and based on that value the insurer has calculated the premium. This is just your common run of the mill commercial agreement.
@Squidfayce You'll really need to back up your assertions here with some specific Australian legal precedent. Case law or it didn't happen.
Calvin27
Eats Squid
Yes that was the wordy thingy I was looking for!
Squidfayce
Eats Squid
The principle you mention relates to ambiguous terms in a contract. Not explicit ones.
When you have a contract term that states "it is a condition of the insurance that the sum insured represents the full or true value of the property", its not ambiguous. Its explicit. You could argue perhaps unfair terms. But I think you'd have a hard time defending insuring a property for 25% of its value and claiming that the terms were unfair when you're declined.
In any case, Contra Proferentum is a "last resort" principle when ambiguities are so extreme they cant be resolved through other normal measures courts usually use, such as determining the primary meaning of the words and the context n which they are used in the contract. Which you can see in the example I have above, is not hard to do because, after all, it is explicit.
Not correct. Its not a run of the mill commercial agreement. Hence why insurance contract law is separate to that or regular contract law. They both have their own individual legislation.
You could insure your shed on a bush block for 10M, and the insurer will calculate the premium and charge you for it because that's what you asked for, however the policy you enter into isn't for a payout of 10M, but for the insurance of the property's value up to a value of 10M. So if it costs the insurer 10k to replace the shed, that's all you're getting. Not 10M (your nominated value).
The opposite is more complicated. If you underinsure, at best you will have your claim averaged. i.e. you wont get the sum youve nominated or insured for but proportionally less comparative to the actual value of the property insured and the damage incured/claim made. This is specifically to stop people under insuring. Consider it a penalty for being a cheapskate. In some extreme cases, such as those where policies haven't been updated for a decade or are reduced after showing your bank the initial COC with the correct value, a successful claim could equate to cents on the dollar.
To add salt to the wound, if you have a mortgage on the property and you cant replace the property with the cents on the dollar you get, the interested party (the bank) will get the funds, not you, on the basis that you have no hope of restoring the assets value with the funds the insurance pays out. SO to prevent further loss to the interested party, the money goes to them to offset the liability you have to them. At this point you may be pursued by the bank for the shortfall in the value of the asset to reach an appropriate residual LVR. Net effect. you get zero and you are in debt by a factor of the shortfall.
Worst case, you can be denied where ethe conditions are explicit. Contra proferentum doesn't apply.
Im not going to scour case law for you to prove a point, nor is there necessarily any published precedent. Shit doesn't always get to court to be tested. Insurers rejecting claims for all sorts of reasons is not news. nor is it uncommon. I would hazard an educated guess that any insurer that doesn't have an explicit under-insurance or averaging clause will likely have one that requires your property to be insured for the full value as a condition of the policy (there will be reasonable internal buffers). Failing to meet the conditions of the policy is grounds for a claim rejection any day of the week. Its that simple.
Worth noting GIO and AAMI have explicit averaging clauses in their PDS.
.
Last edited:
Flow-Rider
Burner
Because you know it's BS, the insurance company wouldn't even stand a chance in court. I've dealt with a lot of insurances and their lawyers over the years and the first thing they say is check the PDS on page blah, blah and clause blah, blah. They're more concerned when people fraudulently try to claim something or try to claim something they don't insure on the policy.
I've never in my entire life heard of any one being denied a claim from being under insured, usually the insurance companies try everything else possible to get out of a claim payout, but never heard that excuse.
Squidfayce
Eats Squid
Ok bud. Logic has been explained. Condition of policy. Don't meet conditions, grounds for claim rejection. Not difficult to understand. Why do you think there are conditions and why do you think attention is drawn to them? For fun?
As to not wanting to scour case law? Fuck off lol. Better things to do and all
But we'll ignore the Contra Proferentum bullshit hey?
Anyway. There us an insurance thread if you want to continue there
Last edited: