Insurers urged to redesign products to combat domestic violence

A new report released by the Centre for Women’s Economic Safety (CWES) has urged general insurers to redesign their insurance products and lobby for regulatory change to combat domestic violence in Australia.

The second edition of the ‘Designed to Disrupt’ report this time includes a ‘Financial Safety by Design’ framework, encouraging general insurers to adopt new measures to disenable domestic violence perpetrators from using insurance products and services as a method of coercive control.

A form of ‘economic or financial abuse’, this covers “domestic and family violence where a partner or family member exerts control through economic resources, including money, banking, insurance products, employment, transport and property, to limit a person’s autonomy and undermine their economic wellbeing”, of which 1.6 million women experience during their life and costs $5.7 billion a year for the victim-survivors.

“We are seeing abusers use a range of tactics to manipulate insurance products to cause harm, including vehicle, home and contents, and personal insurance products,” Rebecca Glenn, CWES chief executive, said.

“For example, perpetrators of abuse change or cancel joint policies without the knowledge of their partner or former partner, or redirect the payment of claims to accounts that partners do not know about or cannot access.

“In many cases, insurance policy terms and conditions prevent the payment of claims for damage caused by a policy holder. In instances where an abuser deliberately damages an asset covered by a joint policy, a victim-survivor may have an insurance claim denied.

“These actions may leave victim-survivors, usually women, in very difficult financial circumstances, with damaged assets and no recourse through insurance. But there are simple steps insurers can take to assist victim-survivors of financial abuse and to prevent it from occurring in the first place.”

The report made 19 recommendations to initiate talks between Australia’s general insurers, government, regulators and consumer advocates, including:

• All general insurers to close loopholes that enable perpetrators to cancel insurance policies without the knowledge or consent of victim-survivors;
• The general insurance industry to include a ‘conduct of others’ clause as a standard, enabling victim-survivors to make a claim when perpetrators deliberately damage property; and
• The government to modernise the General Insurance Act so that products can be redesigned with features that protect against financial abuse.

“General insurance is designed to provide financial protection from unexpected events. But too often victim-survivors of domestic and financial abuse find they don’t have the coverage they thought – either through deliberate tactics of perpetrators or due to common insurance rules and exclusions which penalise them,” Report author and UNSW School of Social Sciences Adjunct Associate, Professor Catherine Fitzpatrick, said.

“While insurers are making improvements, our research found a lack of consistency across the industry. This means some victim-survivors will receive support that is empathetic and trauma-informed, with flexibility that enables solutions tailored to their individual needs. Others continue to struggle with dismissive or judgmental staff, risks to their safety or compounding financial hardship.

“The Insurance Contracts Act needs to be modernised to strike a fairer deal for victim-survivors and create consistency across the sector, with a clear framework for insurance companies already working hard to update their policies, processes and practices to improve customer outcomes.

“If the law can contemplate foreseeable risks like floods, it could reasonably include the risk of domestic and financial abuse.”