Tele-troubles

Sydney Morning Herald

Saturday August 14, 1999

VITA PALESTRANT

The General Insurance Enquiries and Complaints Scheme, as far back as 1995 in its annual report, raised the problems that can arise when insurance cover is arranged over the phone.

Problems with telemarketing are at their sharpest with cover notes when a claim arises before any signed documentation has been provided.

One such case that came before the scheme involved a motor policy claimant who said he had been asked a number of questions by the insurer but nothing about prior accidents and the duty of disclosure had not been recited to him.

One of the intending drivers was under 21 and he'd had a recent at-fault accident.

The company maintained that had it known this it would have refused a cover note. It argued the relevant questions would have been asked.

The scheme put this to the test and found even after volunteering information that one of drivers was under 21 and had had a major at-fault accident, a cover note was issued.

The report notes that consumers completing a written proposal are in a different position from those arranging insurance over the phone. The former have the duty of disclosure before them in black and white with time to think about it, while the latter must answer on the spot.

The scheme's spokesman Paul O'Connor says the industry's code of conduct has addressed the problem.

But consumers should keep a record of what's said over the phone and check their documentation when it arrives.

HOT TIP

Don't buy an insurance policy solely because its price is right. it may not be as comprehensive as the more expensive offerings.