If You Cancel Your Insurance Policy When Does Your Coverage End?

tonydav on 26/03/2021 - 10:22
Last edited 26/03/2021 - 10:23

I made a claim on my policy with Woolworths insurance at the end of January for storm damage to my freezer. It's been a shit experience and I'm still yet to get the payment that they approved for loss of food. They have approved the repair and this will happen in April. I've paid the excess.

This has been the second bad experience with Woolworths and hence decided to cancel the policy. When I contacted them they advised that as I still had a claim in progress I couldn't cancel.

This doesn't make a lot of sense to me. The claim related to a period that I'd paid the policy for. But I can't find anything about this situation anywhere.

Thoughts?

Home & Garden

Comments

  • FoxJump on 26/03/2021 - 10:26

    fascinating situation. I have also wondered about this.
    Would be fun if mid-way the claim you have a renewal too

  • tonydav on 26/03/2021 - 10:27

    Or moved house? Personally I think they're trying to bluff me and there is no legal standing but…..

  • SF3 on 26/03/2021 - 10:27
    +4

    Thanks for speaking to Woolworths to understand your position before posting to OzB :) Unlike most OPs.

    I still had a claim in progress I couldn't cancel.

    It doesn't sounds right.

  • pharkurnell on 26/03/2021 - 10:28
    -6

    They've told you what the go is, accept it.

  • ihbh on 26/03/2021 - 10:42
    +5

    Pro tip: Make sure you've got new cover before you cancel old cover.

    • tonydav on 26/03/2021 - 10:44

      I've organised another policy with St George. So at the moment basically double paying.

      • Naigrabzo on 26/03/2021 - 12:12

        I don't think you can have double cover? You can only get one payout incase of issues.

        • Ridiculous Panda on 30/03/2021 - 09:25

          Imagine if you can actually insure your car or house with up to 25 companies and then get 25 times worth of the damage.

  • bobbified on 26/03/2021 - 10:45
    +3

    When I contacted them they advised that as I still had a claim in progress I couldn't cancel.

    I don't know whether what they told you about cancelling is true or not, but the logical thing to do would be to chase them to finalise the claim asap and then cancel straight after. If they're outside the expected service standard, then escalate it internally in writing. If that still doesn't move things along, there's always the insurance ombudsman (AFCA).

    It's been a shit experience…

    I stay away from budget and reseller type providers for a reason, even if they're cheaper. They're always happy to take your money at that start. It's during the time you make a claim that the reason for the differences in premiums becomes more apparent.

    • tonydav on 26/03/2021 - 11:02
      +1

      Basically that's my approach. I've contact the insurance law service but they aren't likely to get back to me for a few weeks.

  • Euphemistic on 26/03/2021 - 11:13
    +1

    Are you paying monthly or annually? My understanding is that the monthly payments are to add up to a year. Ie if you make a claim at 6months, then they will ensure you pay the remaining 6 months in the event of cancelling ongoing insurance after a claim. Ie you need to pay the full 12 months to be covered.

    That’s what I understood many moons ago. That may have changed since so many more companies are doing monthly payments.

    • tonydav on 26/03/2021 - 11:34
      +1

      It's monthly but that's not how it works. I do know that it's that way if you claim a write-off on your monthly car insurance. Possibly also the case if I claimed a total loss of house.

      This is what the PDS says in relation to policy cancellation:

      Cancelling your policy
      If you want to cancelYou may cancel your policy by contacting us. If you paid an annual premium, we will refund the full amount, less:Ÿthe amount covering the period you were insured for; Ÿgovernment or statutory charges we are unable to recover. If you pay your premium by monthly instalments we will not provide a refund

      • apsilon on 26/03/2021 - 11:44

        I do know that it's that way if you claim a write-off on your monthly car insurance.

        It doesn't have to be write off, it's any claim. The policy is annual, you're just paying it in installments. If you make a claim then you must complete the full annual payment. I can't see this being any different.

        • tonydav on 26/03/2021 - 11:48

          Yeah. Might be the case for cars. Not the case for home insurance though.

          • apsilon on 26/03/2021 - 16:16

            @tonydav:

            Not the case for home insurance though.

            I'm yet to see anything that proves it isn't. You've entered into a contract. Until the full annual amount is paid, you haven't met your obligations under that contract. If you cancel without paying in full, the contract would become void. Now I do agree that if you'd paid the full year, make a claim and then cancel, that claim is still valid because the contract is in effect at the time of the claim and you've met all your obligations.

  • tonydav on 26/03/2021 - 11:42
    +15

    So the Insurance Law Service rang me back. As I suspected, as long as you have coverage for the time of the claim they can't stop paying the claim because you cancel the policy.

    Next step is to lodge a complaint via their internal department. 45 days to respond and if that goes no where lodge a complaint via AFCA. Apparently they have "incentive" to resolve it as they get financially penalised for every complaint lodged, and further penalised the longer it goes on.

    • Naigrabzo on 26/03/2021 - 12:13
      +1

      Nice. That's really good information. Good luck with it.

    • try2bhelpful on 26/03/2021 - 12:32
      +1

      Thanks for the update. That makes sense.

    • blitz on 26/03/2021 - 13:08
      +5

      Props to OP for actually checking with the authority and then updating here. Good work!

    • Love a bargain on 26/03/2021 - 16:38
      +4

      Make sure you ask for a refund of the premium that you wouldn't have paid had you been allowed to cancel when you first contacted them.

    • SF3 on 27/03/2021 - 09:18
      +1

      +1000 for OP for following through and sharing with the community from OP’s Question, then turn into an excellent PSA 👍 👍 👍

      Hope all goes well OP!

    • tonydav on 30/03/2021 - 08:25

      Thanks everyone. I'm still waiting on this to be resolved but will provide updates once it's sorted. Will probably take a while though.

  • JimmyF on 26/03/2021 - 13:11
    -1

    This has been the second bad experience with Woolworths (Insurance)

    Shocked… Went with a cheap insurance company and then surprised they don't get the royal treatment.

    You get what you pay for.

    When I contacted them they advised that as I still had a claim in progress I couldn't cancel.

    Insurance covers you for the period of the policy. But I think because you want to CANCEL the policy and not just let it run its course and 'expire', might be why you are having issues.

    Why not just not renew and when the policy is due, go with someone else?

    • boomramada on 26/03/2021 - 15:02

      Why not just not renew and when the policy is due, go with someone else?

      Something I would do

      • JimmyF on 26/03/2021 - 18:57

        Kinda seems the easy way out of the mess to me as well!

        • tonydav on 30/03/2021 - 08:27
          -1

          That was actually my intention. But the storm happened 2 days before the policy expired.

          So I then felt I'd continue paying a few more months of the policy. Which FWIW isn't "cheap" at around $3500/year.

          I tried to do the right thing but the issue is the incorrect "advice" they gave - i.e. that I couldn't cancel.

          • JimmyF on 30/03/2021 - 09:48

            @tonydav:

            Which FWIW isn't "cheap" at around $3500/year.

            Woolworths is a CHEAP insurance company regardless of the price you pay.

            What are other companies charging? $4000? $5000?

            • tonydav on 30/03/2021 - 15:07

              @JimmyF: The new insurer is $2400.

            • tonydav on 30/03/2021 - 15:12

              @JimmyF: And the point isn't really relevant.

              It's like me buying a Hyundai, having troubles and you saying "well you should have bought a Mercedes".

              The point is they have a PDS and are furthermore covered under relevant Acts in Australia. Whether it cost me $100/yr or $10,000/yr doesn't make any difference. They have to follow their own PDS and the relevant Australian laws. They didn't, hence the issue.

              • boomramada on 07/04/2021 - 14:40
                -1

                @tonydav: You are crying in a wrong thread then, you should do this https://www.google.com/search?q=insurance+ombudsman+australi…
                and talk to them.

                They have to follow their own PDS and the relevant Australian laws. They didn't, hence the issue.

                You wish, then we all should go with WW, why not, even come with free points.
                Insurance is not just PDS, it's about a assessores, communication, services, time frame, use of contractors and etc.

                This probably give you some idea https://www.moneymag.com.au/best-of-the-best-2021-best-value…

                • tonydav on 07/04/2021 - 14:45

                  @boomramada:

                  You are crying in a wrong thread

                  NFI why you think I'm "crying".

                  Was after advice. Didn't really get any, sorted and left advice for others on how to proceed if something similar happened to them.

                  If you'd bothered to read my final post you will realise that I did get my policy cancelled when requested, was refunded the extra month, and they gave me $100 and $50 gift cards.

                  Hardly "crying".

                  Furthermore your suggestion to contact the "insurance ombudsman" is wrong. In this case you contact AFCA.

                  But thanks anyway for your comments.

  • OzHunterNSW on 27/03/2021 - 10:44
    +1

    That sound like CRAP!
    They could effectively drag it on for years, and each month you are paying toward the payout.
    I would lodge a complaint

  • tonydav on 30/03/2021 - 11:35

    So a further update for those following at home.

    Hollard (the underwriters) contacted me today to advise that their internal review had found Woolworths Insurance provided incorrect advice and that I was entitled to cancel my policy as requested on 19 March. The policy will be cancelled and the payment on 24 March refunded.

    Furthermore they gave me a $100 Woolworths gift card.

  • tonydav on 30/03/2021 - 15:06

    Final update. Woolworths contacted me today with the following info (via the underwriter). All sorted now. The process works :)

    You are right, there would be no reason, the customer should be able to make a claim and it to be settled even if policy is cancelled in this instance.

    I feel that the CSR was confused with other situations in which we cannot cancel until term has ended or claim had settled. Feedback has been provided to the CSR.

    Policy cancelled as of 19/03/2021 as per customers original request and refund of $284.05 is currently pending approval.”

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