A claimant who challenged his insurer’s imposition of an additional $2000 excess on his property policy because of his claims history has lost a dispute before the complaints authority.

The insured said he was made aware of the increased charge when lodging a claim last November.

But insurer IAG said it told the man about the “imposed excess” when his building and contents cover renewed in July last year.  

It said it acted because of the insured’s claims history and “pattern of loss”. Its guidelines stated a $2000 imposed excess applied “when a customer has six or more claims in the last three years unless strong reasons exist”.  

The man had lodged seven claims in the previous three years for weather-related losses and accidental and “sanitary fixture” damages.  

The claimant argued the excess increase – on top of the standard $750 – was unfair because it was made without his agreement.

He called it “unfair, unilateral and surreptitious”, and said IAG had not informed him that lodging claims could lead to an imposed excess.

But the Australian Financial Complaints Authority says policy renewal documents explained the imposed excess.  

And it finds IAG was not required to tell the insured that lodging claims could lead to such action.  

“I am satisfied the insurer fairly and clearly informed the complainant of the imposed excess prior to the policy renewal in line with its obligations,” an AFCA ombudsman said.

“It was then up to the complainant to review the policy terms and conditions offered at renewal (including the excesses) and decide if he wanted to accept these terms. By paying the premium, the complainant accepted the terms of the policy renewal offered including the imposed excess.”  

See the ruling here.