SCORES of St Patrick’s Day fire victims have received letters from insurance companies claiming they will take over the right to pursue damages from Powercor.
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Maddens Lawyers principal Brendan Pendergast, one of Australia’s leading bushfire lawyers, said insurance company lawyers were always going to act in the best interests of insurance companies. He said the insurance companies were the lawyers’ clients, not fire victims.
“That’s their primary obligation, they do the best for their company,” he said.
“This should be all about members of our local community recovering the full measure of their losses.
“I am concerned about that focus being blurred, significantly. Maddens will stand up for the people of south-west Victoria and resist this insidious incursion on their rights.”
Mr Pendergast, who has launched class actions in relation to the Terang, Garvoc, Gazette and Gnotuk fires which devastated the region earlier this year, said he did not concede that the insurers had the power they purported to have - the ability to take control of a victim’s claims.
He said that question was previously the subject of action in the Supreme Court of NSW after the Springwood fire in 2013.
More than 500 fire victims were opted out of a class action by their insurers but ultimately the Court ruled the insurers did not have that power.
“On the back of that decision, insurers have re-written their policies,” he said.
“I have spoken to the majority of people who have registered in St Patrick’s Day fires class actions.
“Not one insured person to whom I have spoken has ever understood that their insurer claims to be able to take over the conduct of their claims for uninsured losses.
“Not one person - no one has understood that.”
Mr Pendergast said any changes to policies had not been brought to any victim’s attention and they had not been given the opportunity to seek legal advice.
“It’s been slipped into the body of Product Disclosure Statements,” he said.
“And now, following this catastrophic event, victims are being contacted by their insurers who are claiming to have the right to take over.
“People are receiving letters asking that they refrain from taking any steps to pursue recovery of their uninsured losses.”
The lawyer said solicitors are acting for insurance companies on both sides of these disputed claims.
He said in some instances the same insurer has insured both Powercor and the victim, which seems to be a conflict of interest.
“You have big companies’ insurers on both sides of the ledger and the victim’s needs and concerns are being made a secondary issue,” he said.
“Our primary focus is the recovery of victims’ losses.”
Mr Pendergast said his firm had acted for hundreds of fire victims and rarely encounters someone who is fully covered by insurance.
“Everyone is either under-insured or not insured - that’s the standard victim,” he said.
“What we have here is insurance companies trying to take over and victims are being left bemused, confused, upset and angry by what is happening.
“They don’t want people from the big end of town in Melbourne or Sydney saying they are taking over.”
Mr Pendergast said that a meeting was held earlier this month with Terang and Garvoc fire victims and further meetings would be held.
“We are seeking to provide information and dispel some of the confusion,” he said.
“Insurance companies should step back, let the class actions proceed, allow recovery to the full extent of damage and then dealing with the insurance payouts will proceed at that time.”
The lawyer said insurers saying they were going to negotiate with Powercor’s insurer simply did not pass the sniff test.
He said he had one client who had two second-hand vehicles covered by insurance which had resulted in a $20,000 payout.
“But he, his wife and their children have suffered total losses of approximately $1 million and his insurer is attempting to take over pursuing all those losses,” he said.
“We have insurers saying we have paid out $20,000 for two second-hand vehicles and there’s a clause in a policy that they claim now allegedly entitles them to take over the whole thing.
“Those victims are perplexed, disenchanted and very angry.”
Mr Pendergast said there could be more than 50 fire victims in a similar situation, with many receiving letters from insurers.
“Maddens are on the ground, experienced, competent, equipped and we are confident we will recover full losses,” he said.
An IAG spokeswoman said its focus has been helping customers and their communities get back on their feet as quickly as possible following the St Patrick’s Day bushfires.
"We have not commenced class action proceedings or any other form of legal proceedings at this stage," she said
"As an insurer, we consider our options for making a recovery where we have paid our customers’ claims arising from a particular event and where another party could be at fault.
"In this case, we have initiated negotiations with Powercor to assist in recovering our customers’ overall losses, including their uninsured losses, and to recover our insurance losses.”
IAG is still in the process of collecting information from its customers to determine the extent of their losses.
The process of assessment includes information gathering from the customer, as well as additional relevant advice and information from expert sources.
IAG customers unsure of their options relating to overall losses, including uninsured losses, can contact IAG on 02 9292 2047 or via email on - bushfirerecoveries@iag.com.au
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