In March 2020 Gerry’s work van was hit by a car. The driver of the other car accepted responsibility. Gerry lodged an insurance claim through his broker the following day. A loss adjuster was appointed two days later. The same day Gerry emailed his insurance broker saying he was thinking about buying a new van, and the broker responded saying “perhaps it is time to look for a replacement van.”
Ten days after the accident Gerry bought a new van, and later the same day the insurer advised that they would be repairing the van. The country went into Covid-19 lockdown and nothing happened until May 2020. There were further delays repairing the van and in July 2020 the repairer offered Gerry a replacement van. Gerry complained to his insurer who initially offered, in addition to repairing the van, to pay for a warrant of fitness, and a battery and new tyres needed for the warrant, as well as the equivalent of 8 weeks’ rental vehicle charges.
The van was not properly repaired and Gerry rejected the insurer’s offer. Gerry wanted the van written off and to be paid $25,500, the value of the van, and compensation for inconvenience.
The insurer eventually agreed to pay Gerry $25,500 and $5,000 as compensation for inconvenience. Gerry accepted this offer eight months after he submitted the insurance claim.
Although Gerry’s complaint with the insurer was resolved, he complained about the advice given by his broker.
The broker said that they had done everything they could to help Gerry, including negotiating with the insurer to have the $25,500 claim paid and the compensation for inconvenience. Gerry did not accept the broker’s response and complained to FSCL.
Dispute
Gerry complained that it had taken eight months to repair his van and this was unacceptable. Gerry said the broker told him to buy a replacement van when the insurer had not yet decided whether to replace the van or write it off. Gerry said he would not have bought a replacement van if he knew the insurer intended repairing the old van. Gerry also said his broker should have told him he could choose the repairer. Gerry was not happy with the repairer’s work and said that his own repairer would have done a better job. Finally, Gerry complained that he was paying double for insurance. He was paying to insure his van while it was at the repairer as well as to insure the new van.
The broker did not accept any responsibility for the delay. They had processed the claim quickly, had kept in touch with Gerry throughout. Any delay was caused by Covid-19, the insurer, the repairer, and Gerry himself. The broker did not accept they told Gerry to buy a replacement van. The broker felt they had achieved a good outcome for Gerry. Initially the insurer wanted to repair the van, but after the broker’s involvement, the insurer agreed to pay the claim out in cash with an additional $5,000 as compensation for inconvenience.
Review
It seemed to us that Gerry’s complaint was really about the insurer’s assessment of the claim and delay in having the van repaired. We explained that although the broker arranged the insurance, they were not Gerry’s insurer. The broker’s role is to find appropriate insurance and help at claims time. The broker is not responsible for assessing loss or paying a claim. This is the insurer’s job.
Although the claim and repair appeared to have taken a long time, this was not the broker’s fault. The insurer had offered $5,000 as compensation for delay during the process.
With respect to the advice to repair the van, we looked at the email and although the broker could have clarified that the claim was not yet assessed, we did not think the broker had actually told Gerry to buy a new van.
We also agreed that the broker could have told Gerry that he could take the van to another repairer, but it seemed that hindsight had a large part to play in this complaint. If the repairer had done a good job, there would be no complaint. In any event the insurer had already compensated Gerry for delays during the repair process.
Finally, we explained that he had not been overcharged for his insurance. The original van was insured, and the insurance had responded at claim time. Although the van was off the road this had no impact on the amount of insurance Gerry needed to pay. Gerry had also insured the replacement van, and again had received value for the money paid for the insurance.
Resolution
Gerry was disappointed with our view, saying it was unreasonable for a repair to take eight months. Gerry felt his broker had not appreciated the consequences for him and that if he did not complain the broker would just get away with it and other people would have to endure the same level of inconvenience. However, Gerry agreed to discontinue his complaint.
Insights for consumers
It is not uncommon for people complaining to us to confuse their broker and insurer. This is easy to do. Often the insurance is provided under the broker’s brand. However, the roles are very different. While a broker will often help with a claim, the insurer decides whether or not to pay a claim and a complaint about the claim should be directed to the insurer. A broker might be responsible, in part, if they have held the process up by not passing along information in a timely manner.
