A new report calls for general insurers to disrupt domestic violence in Australia by re-designing products to prevent financial abuse.
Rebecca Glenn, CEO of the Centre for Women’s Economic Safety, says the centre’s second Designed to Disrupt discussion paper proposes a Financial Safety by Design framework for general insurers to make it harder for perpetrators to misuse products and services as a tactic of coercive control.
She says the centre is seeing abusers use a range of tactics to manipulate insurance products to cause harm, including vehicle, home and contents, and personal insurance products.
“For example, perpetrators of abuse change or cancel joint policies without the knowledge of their partner, or former partner, or redirect the payment of claims to accounts that partners do not know about or cannot access.”
She notes that in many cases, insurance policy terms and conditions prevent the payment of claims for damage caused by a policy holder.
“In instances where an abuser deliberately damages an asset covered by a joint policy, a victim-survivor may have an insurance claim denied. These actions may leave victim-survivors, usually women, in very difficult financial circumstances, with damaged assets and no recourse through insurance.”
…there are simple steps insurers can take to assist victim-survivors of financial abuse…
Glenn says there are simple steps insurers can take to assist victim-survivors of financial abuse and to prevent it from occurring in the first place.
The report makes 19 recommendations that aim to spark discussions with general insurers in Australia, plus government, regulators and consumer advocates. It calls for:
- All general insurers to close loopholes that enable perpetrators to cancel insurance policies without the knowledge or consent of victim-survivors
- The general insurance industry to include a ‘conduct of others’ clause as a standard,enabling victim-survivors to make a claim when perpetrators deliberately damage property
- The government to modernise the General Insurance Act so that products can be redesigned with features that protect against financial abuse
Report author and UNSW School of Social Sciences Adjunct Associate Professor Catherine Fitzpatrick said while insurers are making improvements, the research found a lack of consistency across the industry.
Economic abuse includes financial abuse and is a form of domestic and family violence where a partner or family member exerts control through economic resources, including money, banking, insurance products, employment, transport and property, to limit a person’s autonomy and undermine their economic wellbeing.
The centre says at least 1.6 million women will experience economic abuse during the course of their life, with a direct cost to victim-survivors estimated to be $5.7 billion each year.
On International Women’s Day, the centre is urging general insurers to recognise how their products are misused and take action to prevent financial abuse.
The centre says that Designed to Disrupt: Reimagining general insurance products to improve financial safety is the second in a series discussing how the finance sector can identify and mitigate the risks of financial abuse. It follows the launch of a 2022 paper looking at the banking industry. Since then, 14 Australian banks have updated their terms and conditions to recognise financial abuse.
