Disaster Support Lawyers Australia
In today’s world, natural disasters are becoming more frequent. When this occurs, we often rely on insurance companies to reimburse us for the loss and damage that occurs to our homes, businesses and property.
Unfortunately, insurance companies sometimes don’t honour these agreements, instead relying on loopholes and technical legal arguments to avoid repairing or paying for damage caused. This can leave people out of pocket, destitute and homeless.
Duty to Act in the Utmost Good Faith
Many people don’t realise that insurance companies are held to a higher standard than many other corporations in Australia. Part II of the Insurance Contract Act 1984 (Cth) implies a duty of utmost good faith into all aspects of the relationship between an insurance company and the insured person. A breach of this duty is a breach of contract, as well as a breach of the legislation, and it exists at common law as well as in statute. It is a stringent duty.
The High Court has spoken at length as to the very intentional and particular use of the word “utmost”;[1] this is a duty that goes beyond an ordinary duty to act in good faith and that is because an insured person relies on an insurer to provide them with assistance during critical periods of time in which their place of livelihood (for example) has been damaged and is in jeopardy of further damage.
The Insured person is therefore well within his or her lawful rights not only to expect the Insurer to fulfill its contractual obligations towards them, but to do so in accordance with the principle of utmost good faith. This means that an Insurer must be honest, efficient and fair. It also means that an Insurer needs to be very careful when relying on an exclusion in the policy to reject a claim.
If you’ve had an insurance claim rejected in circumstances which you believe are unfair, we can help.
[1] See CGU v AMP [2007] HCA 36