Imagine going to your insurer to make a claim after a car accident, only to find that you’re no longer insured.
That’s exactly what happened to Ally Barker* when her abusive relationship ended.
Although both she and her ex-partner were on the policy, he cancelled the car insurance without her knowledge.
As with many domestic and family violence situations, Ally and Justin* had an acrimonious split.
Justin was unhappy that Ally had decided to leave the relationship. He had always taken care of the insurance policies, including for Ally’s vehicle.
A few months after the relationship ended, Ally was involved in a car accident. It was only when she lodged a claim that she discovered she’d been driving an uninsured vehicle.
Barker is not alone. Many Australians are largely unaware that insurance can be used as a form of abuse by perpetrators.
A study by insurer Allianz Australia and YouGov found 41 per cent of those interviewed were unsure as to why they would need to notify their insurer if they were in a family violence situation.
The Understanding Family Violence and Risks of Insurance survey and report by UNSW Gender Violence Research Network was commissioned to help educate the public and create a more detailed understanding of the risks of joint insurance policies and the support needed for victims.
The study found 78 per cent of Australians surveyed did not realise insurance can be used to inflict financial and emotional harm by a partner named on the policy. Fifty one per cent of Australians surveyed didn’t realise that you could impersonate someone to an insurance company to find out personal information.
Sema Musson, Allianz Australia’s general manager of conduct and customer advocacy, said the report revealed there were complex domestic and family violence issues in an insurance context, and that, paired with low consumer understanding, required a tailored and sensitive response.
Musson said in most circumstances, a cancelled policy would mean the vehicle was uninsured and, therefore, not entitled to a payout from the insurer.
She explained further that when people were going through a separation or were in a family violence situation, they often did not think about the risks of continuing to hold a joint insurance policy.
Fortunately, Ally was one of the lucky ones because she pursued her case with her insurer.
After reviewing her situation, her insurer allowed her to have her vehicle covered under the original policy.
Insurance risks for people in domestic violence situations
When people are going through a separation or are in a family violence situation, they often do not think about the impact of continuing to hold a joint insurance policy. If both names remain on a policy, a perpetrator may:
- Be able to change or cancel an insurance policy, removing beneficiaries and altering the value of an asset within a policy
- Be entitled to up to half of an insurance payout
- Gain access to personal information about a victim, such as updated contact or address information
- Withhold payments on an active insurance policy causing the policy to lapse or become invalid when a claim is lodged
- Purposely inflict damage on an insured piece of property, rendering the insurance policy technically invalid for coverage in the event of a claim
For anyone in a similar situation to Ally, Musson added, “If you become aware that the policy has been changed without your consent, contact your insurer if it is safe to do so and they’ll find a way to work with you to protect their assets.”
What you should do about your insurance in situations of family violence:
- Notify your insurer of your situation
- If it is safe to do so, discuss how to separate your policies from your ex-partner/family member
- Ask your insurer whether there is any additional support they can provide in relation to your insurance
- Seek independent legal advice
*Alternative names used to protect individuals.