Matt Tso / Stuff
Vicky Singh says she and her family will face financial hardship if her insurance company cuts her housing allowance. The allowance was not renewed despite the company’s contractors not completing work on his fire-damaged home.
Vicky Singh was thanking her lucky stars for insurance when a fire made her home in Wainuiomata uninhabitable in August last year, but now she’s not so sure.
She feels she has been left behind by her insurer, AA Insurance, after learning that her housing benefit would be terminated next month as repairs were not completed on her home.
“Your whole life you pay for insurance thinking you’ll be covered, but you’re not. You have to fight for every little gesture. I cried – mentally it broke me to pieces.
After accepting her claim and contracting the repairs, AA Insurance told Singh that her home would be ready in May 2022. She received a $20,000 housing allowance to house herself, her three children and the family dog during the repairs.
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Singh became concerned when work on the house began to be pushed back. A shortage of building materials was mooted and this month was told the deadline would not be met.
The fire, which Singh’s family escaped in the early hours of the morning, destroyed the living room, kitchen and part of the roof. His house remains wrapped in plastic to protect it from the weather.
This week, AA Insurance informed her that the housing allowance would end. He had already supplemented it with an additional $14,000.
Tom Bartlett, housing claims manager at AA Insurance, confirmed that supply chain issues had affected work. He appreciated that it was a difficult time for the family, but said the company had gone above and beyond to help them.
“We have already extended its coverage beyond the policy limit.”
He said the company works closely with its customers to make the claims process as smooth as possible.
The Financial Services Council’s Insurers’ Club polled the public on the main reasons why people were underinsured.
“The temporary housing allowance in our home insurance policies is designed to ensure our clients have suitable accommodation while repairs are being made to their home. Ultimately it is up to them how they choose to spend it, but we are taking steps to discuss options with clients, including how the allowance can be used to ensure it is comfortably sufficient.
Singh said the fact that his house was not repaired was not his fault and felt that AA Insurance should not reduce the allowance until their contractors have completed the work.
Bartlett said AA Insurance will continue to provide support for Singh and his family until repairs are complete..
Alan Knowsley, managing partner at Rainey Collins Lawyers, said a housing allowance usually covers the period the client is away from home.
However, the policies differed and the company might be within their rights if something like a set time frame was included.
“What the insurer is obligated to pay depends on the terms of the insurance contract.”