In 2021 Hailey*, a school principal, arranged insurance to cover the cost of any damage and repairs to her school’s devices and equipment. On 5 December 2022 at about 7pm, the insurer sent Hailey an email saying that the insurance would no longer be offered moving forward, and that any current insurance policies would come to an end in mid-2023. The insurer confirmed that no premiums would be charged for the last six months.
Hailey received the email but thought it was an advertisement. She didn’t discover the cancellation until the second half of 2023 when she had six devices that needed to be repaired and found out that she had no insurance cover.
Hailey wasn’t happy and contacted FSCL for help.
Dispute
Hailey’s main complaint was that the insurer’s communication about the policy being cancelled was poor. She wanted to make sure that no other schools were affected, and that the insurer took steps to improve their communication in the future. Hailey said that there had only been one email sent about the cancellation, that it was sent during the busy period at the end of school year, and it was sent outside working hours. There were no follow ups or reminders to bring it back to her attention.
The insurer agreed that their communication about the policy ending could have been clearer.
Review
Although FSCL found the insurer’s communication about the cancellation could have been clearer, and that they should have sent reminders, it did not find that the school had suffered any loss. Hailey hadn’t found new insurance cover after finding out that the school’s insurance had ended and instead had been using the money she would have spent on premiums to repair the school’s devices as needed. Further, an insurer can decide to stop providing a particular policy – the cover was never going to be available after mid-2023.
To resolve the complaint, the insurer sent Hailey an apology letter acknowledging that their communication should have been better, and that they had not heard of any other schools being affected. The insurer also offered to repair three of the school’s devices which were damaged after the policy ended. FSCL considered this to be a fair and reasonable resolution.
Resolution
Hailey accepted the insurer’s letter, and FSCL closed its file.
Insights for participants
Insurers should ensure that any major changes to, or cancellations of, policies are clearly communicated and brought to customer's attention.
* name changed
