Checklist for insurers

Insurance is a valuable economic resource. It is important that the protection it affords is available to victims of abuse.

If you are an insurance professional, this checklist is designed to support you to test the performance of your products and procedures, and assess whether victims of domestic abuse are being treated fairly. It is vital that the circumstances of domestic abuse that create the most acute need do not result in the protection being lost.

In partnership with:

Insurance and domestic abuse

The circumstances of domestic abuse may not be clear-cut and can give rise to questions about insurance cover. The position may seem chaotic and confused, especially in relation to the nature of the relationship between the abused and the abuser. An abusive partner may act maliciously, and so a traditional approach to an insurance history or to claims (based on “normal”, predictable situations and relationships) may not be suitable and is liable to produce an unfair outcome.

This resource outlines a number of typical factual situations where the circumstances of domestic abuse can give rise to questions about insurance cover, based on a review of the decisions of the Financial Ombudsman. These may provoke a discussion about the issues that may arise in connection with your insurance products and a review of your:

• underwriting approach
• policy wording
• internal guidance regarding the interpretation of policy language
• customer service and claims-handling procedures

For further information on economic abuse and insurance, you can find our latest briefing to the sector here (developed alongside the Aviva Foundation with additional support from Aviva UK).

Underwriting

Could your underwriting criteria or processes unfairly disadvantage the victims of domestic abuse?

Could the “profiling” of applicants (relying on a range of financial, social and biographical factors) lead to victims of domestic abuse being treated unfairly?

An applicant may have a claims history that results from being abused (property damage caused by an ex-partner, for example). The context that gave rise to the claims may be over, but is that history treated as relevant to current underwriting?

The circumstances of a victim of domestic abuse might not produce an “attractive” (in underwriting terms) “risk profile”: for example, there may be frequent changes of address or evidence of financial stability might be lacking.

Who is covered?

Does the policy make clear who has the benefit of cover?

Issues can arise under a buildings and contents policy:

• to what extent does someone living in an insured property, but who is not the policyholder or named on the policy schedule, have cover?
• does the ownership of the property make any difference?

Authority to alter the cover

Does the policy set out, clearly or at all, who has authority to alter the cover?

An abusive partner may act maliciously, for example, by altering the cover and this could have serious consequences. Alterations could include:

• changes to the parties covered
• changes to the cover itself
• changing the contact details
• cancellation of the cover

Informing parties of changes

Are steps taken to inform all those who may be adversely affected by an alteration in cover

The starting point is whether there is a process for flagging a significant alteration in cover and for identifying who may be adversely affected.

A particular problem can arise in relation to motor insurance. The policyholder may cancel the policy (perhaps with malicious intent), but a named driver could be unaware of the cancellation and may continue to drive – they would be driving uninsured and committing a criminal offence.

Setting or verifying authority to “administer” the policy

Is the process for setting or verifying authority to “administer” the policy suitable in the context of the issues that may arise as a result of domestic abuse?

This may be linked to the question of who has authority to alter the cover.

This process might be undertaken during a telephone call. Verification is often by means of “security questions”. To what extent do people who are not genuinely authorised at the relevant time to administer the policy have access to the information required to answer the questions (which may be mundane, routine personal, address, contact or policy details)?

It is usually convenient (for the insurer and its customers) for more than one person to be able to “administer” a policy, but this convenience can become a disadvantage, and have potentially serious consequences, if someone chooses to act maliciously.

Control of sensitive information

Are suitable processes in place for controlling access to potentially sensitive personal information?

What processes are in place to control the dissemination of sensitive information?

A victim of domestic abuse may have changed their address and new contact information is quite likely to be information that must be kept secret from an abusive partner. Sensitive information could be revealed by mistake or an abusive partner could actively seek to obtain it.

Who can claim and to whom will the proceeds of a claim be paid?

Is it clear who can make a claim? This may be linked to the question of who has cover.

To whom will the proceeds of a claim or a refund of premium be paid? In what circumstances can the payee details be altered?

Exclusions and conditions

Would the application of exclusions or conditions lead to an unfair outcome?

Claims arising in the context of domestic abuse often involve a consideration of policy restrictions, especially exclusions of cover in respect of loss caused:

• by someone in the policyholder’s family, in a close relationship with the policyholder, living or staying with the policyholder or in the policyholder’s household
• deliberately or wilfully by someone known to, or in some form of relationship with, the policyholder
• by someone who was legally entitled to be in or around the insured property.

Insurance policies use a bewildering array of terms to define relationships with the policyholder. Some are easy to apply, but others can be interpreted differently: for example, “family”, “relatives”, “household” and “domestic partner”; “normally resides” or “permanently resides”.

Questions about personal relationships may arise. In the context of domestic abuse, domestic arrangements and the status of a relationship may change suddenly and dramatically. Those changes may not fit neatly within the categorisation used in policy exclusions. For example, a victim of abuse may permit a partner to enter a property to collect belongings, and questions may arise about the scope of that permission. Issues may arise in motor insurance: an ex-partner might take car keys and damage a car, for example.

An ex-partner may use violence or the threat of violence to gain entry to a property, and then commit theft or cause damage. Would the condition that there has to be force and violence used to enter or exit the property be relied on to deny a claim? Would that condition be interpreted as meaning that force and violence must have been used against the property?

Customer service and claims handling

Are there procedures in place to identify customers who may be vulnerable as a result of domestic abuse?

A victim may be unwilling to reveal that they are being abused. Are there procedures in place that would alert the insurer to the warning signs? Are the customer service team and the claims handlers trained to spot the signs?

Insurers should look out for customers who:

• remain silent while another party does all the talking
• instruct the insurer to speak to their partner
• seem to be taking instructions from their partner
• appear withdrawn, fearful, distressed or scared
• are not aware of a policy cancellation or think that the policy was renewed when it has not been
• do not understand or are not aware of recently obtained quotes or policies in their name
• ask questions about another account holder’s behaviour or activities
• have concerns about protecting their personal privacy or safety, or the security of their account/s including personal contact details
• have mistakes or spoils on paperwork indicate that their mail is no longer being
  delivered to their home
• disclose the existence of an intervention order or equivalent
• present a form carrying the customer’s signature but is otherwise completed in different handwriting.

Additional measures may be required: for example, there may need to be special restrictions regarding who can administer a policy or for controlling the communication of sensitive personal information (such as a new address).

The Consumer Duty

Current responses to economic abuse predominantly focus on addressing negative outcomes for victim-survivors after things have already gone wrong. However, these outcomes could be prevented from happening and the impact on survivors minimised if an understanding of economic abuse was reflected within end-to-end product and service design. 

We have developed a briefing paper in partnership with the law firm Simmons & Simmons to help financial services firms consider economic abuse when interpreting what good outcomes (Principle 12) look like for victim-survivors.  

Examples from the briefing on how firms can help victim-survivors of economic abuse: 

• Consider offering individual life insurance policies as a default setting to prevent perpetrators taking out policies on a victim-survivors life and using this as a tactic to threaten and coerce them.  
• Ensure that there are specialist teams in place who can provide support to victim survivors and help them gain financial independence from the perpetrator.   
• Ensure staff have received the relevant training to identify economic abuse and respond adequately to disclosure – again eliminating any further harm.  
• Ensuring that the financial business isn’t gaining financially as a result of economic abuse – for example, considering putting a freeze on interest or writing it off and removing fees and charges. 

For further guidance on the Consumer Duty, read ‘How the Consumer Duty can transform responses to economic abuse’. You can also read our briefing to raise awareness of how victim-survivors of economic abuse are impacted by the insurance industry, funded by the Aviva Foundation.

Last updated July 2023

Further support

If you are working with someone who is experiencing economic abuse, they are not alone. We have information that can support them to take steps towards safety and begin to regain control of their finances. 

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