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We have a claim ongoing at the moment where an insurer has backtracked on their settlement offer and refusing to honour what they originally offered.

A client's TV was damaged and a claim was lodged and accepted, with the purchase order being offered through

Noel Leeming. We sent this confirmation through to our client, who replied with additional questions, being:

- Has the quote I sent through ($7000) been accepted

- What is involved with a purchase order

We then forwarded these queries to the claims handler, and this was their exact response (copied from the email)

"Yes the claim is been accepted for $6999.00 less excess $400.00. Means Noel Leeming will contact the insured directly and they can replace the TV like for like."

We then sent this offer through to the client, and they have responded with acceptance and requested the purchase order be sent.

When the client has gone to Noel Leeming to pick up their new TV, they have been informed that the TV offered for replacement is a different model, worth $2399, and that they can©t get the TV they thought they were approved for. They have also been forced by Noel Leeming to pay their excess before they would deal with the client, and our client is now $400 out of pocket and still doesn't have a TV.

We have then gone back to NZI who are stating that this is the correct replacement model, and that the claims handler made a "human error" and they would not be honouring the $6999 TV as replacement. We have taken this up through the claims managers and they are all refusing to provide anything over and above the $2399 TV.

I'm just wondering whether there is an consumer law that may apply to this, and where the insurer stands, with the offer and acceptance nature of the claim progression - The insurer offered and confirmed this offer was correct, after it was queried (being a purchase order to Noel Leeming for the quoted figure of $6999) and our client has accepted the settlement via purchase order based on this offer?

Reply:  Crossley Gates

If there has been a specific offer by the insurer to settle the claim by paying $X, or the equivalent thereof, to the insured (effectively), and the insured has accepted that offer, there may be a binding contract of settlement of the claim that the insurer is bound by.

I add that if the insurer has made a genuine mistake, and $X is clearly wrong, your client may win the battle but lose the war by relying on his or her strict legal rights to force payment. I doubt the insurer will be offering renewal.

December 2020

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