The Financial Ombudsman Service (FOS) is a national external dispute resolution service providing free assistance to consumers to help in resolving disputes relating to general insurance matters.
Assistance is limited to individuals and small businesses. Whilst all participating members agree to comply with binding determinations made by the FOS, consumers are not bound by any determination and retain their right to legal action or other remedies if dissatisfied with the decision.
Types of insurance matters dealt with include most domestic insurance:
- Home building
- Home contents
- Motor vehicle
- Sickness and accident
- Consumer credit
- Valuables and personal property
- Medical indemnity
The Financial Ombudsman Service can also consider some residential strata title policies, certain small business policies and third party motor vehicle disputes for uninsured drivers where the property damage does not exceed $3000. From 1 January 2015, this threshold increased to $5,000.
Assistance is restricted only to those matters which fall within the Service’s terms of reference and for insurers who were members at the time the complaint arose. The terms of reference exclude disputes where the value of the claim exceeds $500,000.
What matters are not considered by FOS?
- Worker’s compensation
- Home owner’s warranty
- Public liability
- Product liability
- Compulsory third party motor vehicle insurance
Procedure for making a complaint
Step 1: consumer must make complaint directly to the insurance company.
Step 2: if the complaint is not resolved within a reasonable time or not resolved to the consumer’s satisfaction they may request that the matter be dealt with by the company’s internal dispute resolution process.
Step 3: if the consumer is unhappy with the internal dispute resolution process they may call the Insurance Ombudsman Service or download a complaint form from their website. A copy of the final decision letter from the company must be included in the application. A complaint must be lodged within 3 months of the final decision of the company concerned.
Step 4: the IOS will attempt to resolve the dispute. If it cannot be resolved then information will be sent to an independent decision maker who will decide the dispute and provide a written decision detailing the reasons behind the decision.
Step 5: if the consumer accepts the decision it must be accepted within 1 month of the date of determination. The company must then comply with the the decision within 1 month of the date of the consumer’s acceptance. A consumer may be asked to sign an agreement indicating that they have no further claim against the company.
Step 6: if the consumer does not accept the decision it is not binding on them and they may choose to take legal or other action.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.