Payouts for hailstorm damage by RACQ Insurance are likely to hit $50 million for Gympie—50% more than anticipated—thanks to the many opportunistic “storm chasers”.
The insurer has defined “storm chasers” as third party contractors who convince householders to file dodgy and trivial claims in the aftermath of an extreme weather event.
RACQ Insurance received over 2760 claims from October last year’s Gympie hailstorm, which the insurer says is 50% more than was expected for such a weather event.
According to the Insurance Company’s spokesman Paul Turner, the “storm chasers” incident could lead to a spike the insurers’ costs and ultimately have a direct effect on reinsurance prices.
“We’re witnessing a high number of claims flooding in long after the event, and we’re getting word from some of our members who are concerned that these “storm-chasers” could be taking advantage of them to make a kill,” he told StormAssist.com.
“More often, claimants are up for insurance expenses from their own pockets for things they would never have claimed normally.
“The difference in Gympie is the huge number of delayed lodgements and the driving force behind them.”
RACQ Insurance has disbursed over $40 million for the “unprecedented” number of claims lodged for property damage, in contrast with the usual pattern for disastrous weather events experienced in Queensland in the last five years.
Mr Turner added that re-insurers are already questioning the new trend of third-parties, which has also become common in Japan and the United States.
“Normally, we would receive around 20% of claims lodged after four weeks post-event,” Mr Turner explained. “The October event saw around 50% of claims lodged after the four-week mark and we’re still receiving between 40 to 50 claims filed each month.
“We strongly believe that the final figure may amount to over $50 million. This is a very worrying trend for Queenslanders that these folks have come in. It’s actually not something we’ve observed a lot in previous years.”
In December, the Insurance Council of Australia (ICA) in response to the Gympie storm noted that it “had initially not declared the situation as an insurance catastrophe. But within two months post the event, the total claims lodged had gone up in an extra-ordinary trajectory.”
Recently, the RACQ Insurance cautioned Gympie residents about third party contracts saying they could end up paying for costly repairs on their own if the claims they lodge will be rejected. Ultimately, this trend could affect the affordability of insurance services for a majority of people.
“As a result of this incident, we may just have to review our product offerings and premiums for this specific area and apply extra diligence to their claims,” Mr Turner recapped.
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