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.
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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:
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).
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.
Issues can arise under a buildings and contents policy:
An abusive partner may act maliciously, for example, by altering the cover and this could have serious consequences. Alterations could include:
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.
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.
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.
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?
Claims arising in the context of domestic abuse often involve a consideration of policy restrictions, especially exclusions of cover in respect of loss caused:
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?
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:
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).
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:
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
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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