Claim stress outweighs disaster

New research has revealed that dealing with an insurer after a catastrophe can be more stressful for policyholders than the event that caused losses in the first place.

Kelly Dixon, from QUT’s School of Psychology and Counselling, studied the mental health impacts caused by the flood disasters in Brisbane in 2011 and Mackay in 2008, producing some interesting incentives for policyholders to utilise the help of a professional broker when dealing with insurers.

The study shows that, while the flooding event was stressful on the day, the most trying part of the experience for many people was the aftermath, including dealing with insurance companies and the re-building process.

“The findings showed that aftermath stress contributed to poor mental health outcomes over and above the flood itself, prior mental health issues and demographic factors,” Dixon says.

“Aftermath stress was the strongest predictor of post-traumatic stress symptoms with 75 per cent of people saying the most difficult aspect was the aftermath and dealing with insurance companies.”

Policyholders who had difficulty with insurance claim processes following the disaster event were more likely to describe the aftermath period as extremely stressful.

The biggest stressors were correlated with insurer staff giving inconsistent information, delays in claim assessment, underinsurance and inadequate compensation.

Commenting on the results of this study, Professor Allan Manning recommends insurers must put themselves in the position of the policyholder when dealing with post-disaster claims.

“This means regular contact, prompt progress payments and making sure that all the trades turn up when they ought and do the proper thing by the insured,” Manning wrote.