General insurers are being called on to disrupt domestic violence in Australia by re-designing products to prevent financial abuse in a new report released today by the Centre for Women’s Economic Safety (CWES).

Rebecca Glenn, CEO of CWES, says the second Designed to Disrupt discussion paper proposes a Financial Safety by Design framework for general insurers to make it harder for perpetrators to misuse products and services as a tactic of coercive control.

“We are seeing abusers use a range of tactics to manipulate insurance products to cause harm, including vehicle, home and contents, and personal insurance products,” Ms Glenn said.

“For example, perpetrators of abuse change or cancel joint policies without the knowledge of their partner or former partner, or redirect the payment of claims to accounts that partners do not know about or cannot access.

“In many cases, insurance policy terms and conditions prevent the payment of claims for damage caused by a policy holder. In instances where an abuser deliberately damages an asset covered by a joint policy, a victim-survivor may have an insurance claim denied.

“These actions may leave victim-survivors, usually women, in very difficult financial circumstances, with damaged assets and no recourse through insurance.

“But there are simple steps insurers can take to assist victim-survivors of financial abuse and to prevent it from occurring in the first place.”

The report makes 19 recommendations that aim to spark discussions with the 90 general insurers in Australia, plus government, regulators and consumer advocates. It calls for:

• All general insurers to close loopholes that enable perpetrators to cancel insurance policies without the knowledge or consent of victim-survivors
• The general insurance industry to include a ‘conduct of others’ clause as a standard, enabling victim-survivors to make a claim when perpetrators deliberately damage property
• The government to modernise the General Insurance Act so that products can be redesigned with features that protect against financial abuse.

Report author and UNSW School of Social Sciences Adjunct Associate Professor Catherine Fitzpatrick said, “general insurance is designed to provide financial protection from unexpected events. But too often victim-survivors of domestic and financial abuse find they don’t have the coverage they thought – either through deliberate tactics of perpetrators or due to common insurance rules and exclusions which penalise them.

“While insurers are making improvements, our research found a lack of consistency across the industry. This means some victim-survivors will receive support that is empathetic and trauma-informed, with flexibility that enables solutions tailored to their individual needs. Others continue to struggle with dismissive or judgmental staff, risks to their safety or compounding financial hardship.

“The Insurance Contracts Act [1984] needs to be modernised to strike a fairer deal for victim-survivors and create consistency across the sector, with a clear framework for insurance companies already working hard to update their policies, processes and practices to improve customer outcomes.

“If the law can contemplate foreseeable risks like floods, it could reasonably include the risk of domestic and financial abuse.”

Co-CEO of Financial Counselling Australia, Dr Domenique Meyrick said, “this significant report from CWES is anchored in lived experience and echoes what financial counsellors are seeing in their casework.

“There’s so much that the insurance sector can do to prevent its products from being weaponised and to support people affected by financial abuse.

“The Designed to Disrupt report on general insurance promises to be a powerful catalyst for change.”

Economic abuse includes financial abuse and is a form of domestic and family violence where a partner or family member exerts control through economic resources, including money, banking, insurance products, employment, transport and property, to limit a person’s autonomy and undermine their economic wellbeing.

At least 1.6 million women will experience economic abuse during the course of their life, with a direct cost to victim-survivors estimated to be $5.7 billion each year.

On International Women’s Day, 8 March, CWES is urging general insurers to recognise how their products are misused and take strong action to prevent financial abuse.

Designed to Disrupt: Reimagining general insurance products to improve financial safety is the second in a series discussing how the finance sector can identify and mitigate the risks of financial abuse. It follows the launch of a 2022 paper looking at the banking industry. Since then, 14 Australian banks have updated their terms and conditions to recognise financial abuse.

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