A reminder that the Claims Handing and Settling Services legislation comes into effect from 1 January 2022.
A new key provision of the Claims Handling and Settling Services and Corporations Act 2001 License obligations is the introduction of a Cash Settlement Factsheet.
What is a Cash Settlement Factsheet?
If a cash payment is not the only option available for the settlement of a claim i.e. the insurance product also allows for repair or replacement, then a customer must be given a written and dated Cash Settlement Factsheet, which includes an outline of the options available and a breakdown of the proposed cash payment.
Zurich’s Cash Settlement Factsheet
Our Cash Settlement Factsheet informs customers of their entitlement to a cash settlement or to have their damaged property repaired or replaced. We may offer to settle a customer’s claim using one or a combination of these settlement options.
Our Cash Settlement Factsheet includes the following information:
- The options for settlement legally available to the customer under their insurance product
- The sum insured, under the customer’s insurance product
- The total amount of the cash settlement being offered
- The amount of each component of the total amount of cash settlement being offered (such as components representing the sum insured, additional payments relating to emergencies and ex gratia payments)
- The customers right to obtain legal and financial advice, before accepting a cash settlement
- A customers’ right to request a review of their cash settlement, including where the claim was finalised within one month of the catastrophe event, and the customer considers that our assessment of the loss was incomplete or inaccurate. The customer can ask us to review their claim settlement, within 12 months of the date of finalisation of their claim, even where they have completed a release.
- The impact a cash settlement has on the guarantee of repairs and any related workmanship issues
- The potential impact to a customer’s insurance conditions, where a cash settlement is accepted, however repairs to damaged property are abandoned or deferred
- How to provide feedback or raise a complaint
When does a Cash Settlement Factsheet apply?
A customer may choose, or we may recommend a Cash Settlement where:
- The customer can or wishes to manage repairs to their damaged property, directly
- The items claimed are difficult to or cannot be replaced
- The damage to the claimed property is only minor or where repairs are not urgent (e.g., do not render your property unusable)
- The claimed property has pre-existing damage or outstanding repairs that require rectification, before claimed repairs can be completed
- There are issues of safety with rebuilding or repairing the claimed property
- The value of the repairs exceeds the customer’s insurance limits / claim allowance
Our Cash Settlement Factsheet applies to our Motor, Property, Marine and Accident and Health claims, where:
- The customer is a Zurich insured policyholder or third-party beneficiary; and
- The customer has a Zurich product with a Product Disclosure Statement (PDS) or is a third-party beneficiary; and
- The PDS specifies an option to settle a claim by way of repair, replacement or cash settlement; and
- The customer is a retail customer; and
- We are settling or partially settling the customer’s claim by way of a cash settlement
The reference to ‘Retail’ insured and Small Business, in the context of the Cash Settlement Factsheet, refers to the Corporations Act 2001 definition. Wholesale customers are any other customers not captured by the definitions above.
If you have any questions, please contact your Zurich representative or a member of the Claims team.