Business Insurance Online :: News
SHARE

Share this news item!

Insured Value Disputes: A Closer Look at Claims Resolution

Insured Value Disputes: A Closer Look at Claims Resolution

Insured Value Disputes: A Closer Look at Claims Resolution?w=400
A recent case has sparked significant discussion around the complexities of insurance claims, focusing specifically on the insured value of personal items like jewelry.
A claimant who had a gold necklace insured for $31,500 found himself at odds with his insurer, QBE, after reporting the item's loss.

Following the claim submission under his home and contents policy, QBE offered to arrange a replacement through a designated jeweler, referred to as Jeweler P. However, the claimant sought a cash settlement instead, prompting QBE to offer $15,048, which reflected the jeweler’s estimate for a suitable substitute.

Frustrated with the compensation amount, the claimant requested the full insured value, raising concerns about the jeweler's qualifications and output quality. This scenario highlights a crucial issue: the perceived mismatch between insured sums and actual claim settlements.

According to the ruling by the Australian Financial Complaints Authority (AFCA), the determination of the claimant's compensation was chiefly based on the actual replacement costs rather than the insured amount or premium that had been paid. “The relevant consideration for the purposes of the complainant’s claim is the actual cost the insurer would incur to replace the necklace,” stated AFCA’s ombudsman.

Adding to the complexity, the claimant expressed doubts regarding Jeweler P's capabilities, citing a negative review dated two years prior. Although AFCA acknowledged the claimant’s concerns about the jeweler's reputation and his belief that the suggested replacement was subpar, these factors did not adequately justify a demand for the full insured amount. The ombudsman concluded, “I am not satisfied these matters entitle the complainant to the outcome he seeks.”

In a further analysis, it was revealed that there were discrepancies in the valuation of the necklace. While the insured necklace weighed approximately 156 grams, Jeweler P’s quote was based on a 150-gram estimate. Following this, AFCA indicated that QBE should reassess the replacement cost to align with the revised details provided by the claimant.

AFCA also denied the claimant's request for additional compensation, emphasizing that many of the delays were predominantly due to his insistence on a resolution that was beyond the policy's provisions. This case underscores the importance of understanding both the terms of an insurance policy and the mechanisms of claims processes, especially when expectations revolve around the insured values of personal property.

This incident serves as a reminder for policyholders: the sum insured may not always equate to the cash settlement in the event of a loss, and insurers are likely to adhere strictly to the actual replacement costs as outlined in policy agreements. To navigate such disputes effectively, clear communication and precise documentation during the claims process are imperative.

Details of this case were shared by Insurance News Magazine, shedding light on the finer points of insurance claims involving high-value personal items.

Published:Monday, 6th Jan 2025
Source: Paige Estritori

Share this news item:

Insurance News

Severe Weather in Eastern Australia Sparks Insurance Claims Spike Severe Weather in Eastern Australia Sparks Insurance Claims Spike
17 Jan 2025: Paige Estritori

Recent storms sweeping across New South Wales and parts of Queensland have led to a surge in emergency calls and insurance claims, as residents grapple with the aftermath of strong winds, heavy rainfall, and hail. This extreme weather has posed significant challenges to numerous households and businesses, prompting a rallying cry for assistance. - read more
Broker Sentenced for Fraudulent Builders’ Insurance Scheme Broker Sentenced for Fraudulent Builders’ Insurance Scheme
15 Jan 2025: Paige Estritori

In a significant legal crackdown, a broker has been sentenced for his involvement in selling fraudulent builders’ warranty insurance to construction firms in New South Wales. This case underscores the urgent need for regulatory vigilance in the insurance sector. - read more
LA Wildfires Set to Shatter Insurance Loss Records LA Wildfires Set to Shatter Insurance Loss Records
14 Jan 2025: Paige Estritori

Recent wildfires in Los Angeles are projected to lead to unprecedented insured losses, potentially exceeding $20 billion USD (approximately $33 billion AUD). This alarming situation underscores the escalating risks associated with natural disasters, as communities brace for the fallout from this catastrophic event. - read more
Catastrophe Bonds: The Future of Cyber Risk Management Catastrophe Bonds: The Future of Cyber Risk Management
07 Jan 2025: Paige Estritori

As digital threats escalate, the financial sector is looking at innovative methods to enhance cyber risk management, with catastrophe bonds emerging as a pivotal tool. The Geneva Association emphasizes the necessity of alternative risk transfer solutions to mitigate the burgeoning cyber protection gap. - read more
Insured Value Disputes: A Closer Look at Claims Resolution Insured Value Disputes: A Closer Look at Claims Resolution
06 Jan 2025: Paige Estritori

A recent case has sparked significant discussion around the complexities of insurance claims, focusing specifically on the insured value of personal items like jewelry. A claimant who had a gold necklace insured for $31,500 found himself at odds with his insurer, QBE, after reporting the item's loss. - read more


Business Insurance Articles

Your Ultimate Guide to Small Business Insurance in Australia Your Ultimate Guide to Small Business Insurance in Australia
Welcome to the comprehensive guide on small business insurance in Australia. As a small business owner, you know that the unexpected can happen at any time. Whether it's a natural disaster, an accident on the premises, or legal action from a client, the right insurance can be the lifeline that keeps your business afloat during challenging times. - read more
How to Choose the Right Insurance for Your Australian Retail Business How to Choose the Right Insurance for Your Australian Retail Business
Running a retail business can be a risky endeavor. While you can minimize some of those risks with careful planning and management, you cannot eliminate them entirely. This is where insurance comes in. Having the right kind and amount of insurance coverage can make all the difference in protecting your business from financial loss, should the unthinkable happen. - read more
The Importance of Adequate Insurance Coverage for Your Small Business The Importance of Adequate Insurance Coverage for Your Small Business
For small businesses, navigating the intricacies of sustainability is a critical task that can be made more manageable through the prudent use of business insurance. Understandably, many small business owners prioritize immediate operational concerns over seemingly discrete matters like insurance. However, as we will explore, insurance is not a mere formality—it's a vital backbone to enduring success. - read more
How to Customize Your Business Insurance to Fit Your Company’s Needs How to Customize Your Business Insurance to Fit Your Company’s Needs
Business insurance is a type of coverage that protects your company from financial losses that may occur during regular operations. These losses could be due to a variety of risks like property damage, legal liability, or employee-related incidents. - read more
The Top 5 Insurance Policies Every Australian Start-up Needs The Top 5 Insurance Policies Every Australian Start-up Needs
When embarking on the entrepreneurial journey of a start-up, it's imperative to safeguard the nascent enterprise with a reliable insurance safety net. Insurance acts as a vital shield, protecting the hard work and innovation of new businesses against unforeseen events and liabilities which can arise in the unpredictable world of start-ups. - read more
The Essential Checklist: What Every Australian Business Owner Needs to Know About Insurance Cover The Essential Checklist: What Every Australian Business Owner Needs to Know About Insurance Cover
When it comes to securing the future of your business, insurance isn't just a safety net; it's a vital tool for stability and growth. As an Australian entrepreneur, navigating the complex world of business insurance can be daunting. That's why understanding the importance of choosing the right insurance cover for your venture is critical for success. - read more
The Importance of Adequate Insurance Coverage for Your Small Business The Importance of Adequate Insurance Coverage for Your Small Business
For small businesses, navigating the intricacies of sustainability is a critical task that can be made more manageable through the prudent use of business insurance. Understandably, many small business owners prioritize immediate operational concerns over seemingly discrete matters like insurance. However, as we will explore, insurance is not a mere formality—it's a vital backbone to enduring success. - read more
Your Ultimate Guide to Small Business Insurance in Australia Your Ultimate Guide to Small Business Insurance in Australia
Welcome to the comprehensive guide on small business insurance in Australia. As a small business owner, you know that the unexpected can happen at any time. Whether it's a natural disaster, an accident on the premises, or legal action from a client, the right insurance can be the lifeline that keeps your business afloat during challenging times. - read more
Essential Tips to Reduce Your Business Insurance Premiums in Australia Essential Tips to Reduce Your Business Insurance Premiums in Australia
As a business owner in Australia, protecting your venture with adequate insurance is a non-negotiable aspect of risk management. The right business insurance acts as a safety net, guarding against unforeseen events that could otherwise derail your hard-earned progress. However, it's not uncommon for insurance premiums to dig deep into your cash reserves, challenging the balance between protection and profitability. - read more
The Top 5 Insurance Policies Every Australian Start-up Needs The Top 5 Insurance Policies Every Australian Start-up Needs
When embarking on the entrepreneurial journey of a start-up, it's imperative to safeguard the nascent enterprise with a reliable insurance safety net. Insurance acts as a vital shield, protecting the hard work and innovation of new businesses against unforeseen events and liabilities which can arise in the unpredictable world of start-ups. - read more


Your free business insurance quote comparison starts here!
Business Name:
Postcode:

All quotes are provided free (via our secure server) and without obligation. We respect your privacy.

Knowledgebase
Indemnity:
A legal principle that stipulates that insurance policies should restore the insured to the financial position they were in before the loss.