The Australian Securities and Investments Commission (ASIC) has reported that home insurers are predominantly opting for cash settlements over managing repairs, which may lead to inadequate compensation for homeowners. This practice has raised concerns about the potential for unfair outcomes, particularly for those already in vulnerable situations following cyclone damage.
The review highlighted that cash settlements were used in over 63% of claims, often based on single quotes from preferred builders, which may not reflect true repair costs. Insurers have been urged to provide more realistic payouts and better support for consumers navigating the claims process.