New Zealand Law Society - Insurance complaints rise

Insurance complaints rise

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Complaints to the Insurance & Financial Services Ombudsman Scheme (IFSO) are at the highest level in 20 years.

The latest IFSO annual report shows that the scheme received 3,227 complaints in 2016/2017 and investigated 314 of them. This is up from the 3,193 complaints it received and 272 it investigated the previous year.

House insurance issues made up 27% of the investigated complaints, vehicle insurance 13%, travel insurance 13% and health insurance 10%. Investigated complaints about financial advisers and credit contracts remained relatively low at 3% each.

IFSO ombudsman Karen Stevens says in a press release there’s a need to improve consumers’ financial literacy as well as their understanding of what they are signing up to. “Many complaints could have been avoided if, for example, people read and understood their insurance policies or their loan or credit contracts.”

Recent natural disasters such as earthquakes, floods and storms is likely to keep IFSO busy, says Ms Stevens, with the scheme still dealing with complaints relating to the Canterbury earthquake. “We continue to be involved with more complex Canterbury complaints, and we have signed a Memorandum of Understanding with EQC so we will be dealing with the Kaikoura earthquake complaints.”