The Insurance Council of Australia has joined insurers in responding to a celebrity podcast that featured a claims advocate slamming industry practices and naming and shaming two companies.

As insuranceNEWS.com.au has reported, Claims Hero founder Luke Dugdell featured on former TV presenter Karl Stefanovic’s show entitled How Australians Get Ripped Off On Home Insurance: An Insider Explains.

Mr Dugdell – who was invited onto the program after helping Mr Stefanovic with a claim – highlighted alleged poor practice and listed Auto & General and QBE as insurers he would avoid.

The insurers rejected Mr Dugdell’s portrayal, and now ICA has released a statement after major news outlets reported on the podcast.

“Insurers paid $51 billion in claims over the last financial year, equating to $207 million per day,” the peak body said. “Insurance claims often come at the most difficult time in people’s lives, and we understand how distressing it can be if a claim doesn’t go the way a customer expects it to. 

“The industry takes its responsibility to all customers seriously, which is why it has undertaken a substantial program of reform in response to the parliamentary flood inquiry and the independent review of the General Insurance Code of Practice.” 

Mr Dugdell raised concerns around low-ball cash settlements and some insurers deploying poor-quality builders. 

ICA said: “The strengthened code submitted to the Australian Securities and Investments Commission last week includes clearer claims time frames and more regular updates, stronger cash settlement requirements, greater access to expert reports and enhanced protections for customers experiencing vulnerability.

“Where an insurer appoints a builder or repairer, the insurer remains responsible for the quality of that work. Insurers work with large networks of builders and tradespeople across the country and rely on them to deliver quality outcomes for customers, particularly when demand surges after natural disasters.” 

ICA’s statement also flags the corporate regulator’s review of for-profit claims management companies following concerns raised about sales tactics, targeting of vulnerable consumers, the scope of fees and cancellation arrangements.  

“Companies like Claims Hero operate as profit-making businesses, not charities or free, community-based consumer advocacy services,” ICA said. “Their business models depend on customers committing to pay fees in return for support with their insurance claim.  

“As a result, claims management companies often pursue cash settlements as opposed to insurer-arranged and warranted repairs, from which fees may be deducted.  

“Consumers should understand the full cost and contractual consequences before engaging any paid representative. They can deal directly with their insurer without paying a third party and can take an unresolved complaint to the Australian Financial Complaints Authority, which is free, independent and can make decisions that are binding on insurers.” 

Mr Dugdell says Claims Hero’s fees are transparent and disclosed to customers, and it does not push customers towards cash settlements. He has previously welcomed ASIC’s review.