When does the responsibility fall on insurance companies?

Tetyana Malecky would often sit on her couch in the dimly lit temporary accommodation, wondering why it couldn’t be just easy. It had been months since moving in and there was no end in sight. It wasn’t a safe environment. There was asbestos and exposed electrical wires in the house which had an exterior that was suffocated by overgrown grass. A flimsy wire fence, which was also intended to be temporary, was barely standing up just to keep her dog Leyland from running away. The ‘dump on the corner of the street’, is often how she would refer to the property.

Tetyana was an older lady who lived alone with her black cat and greyhound. In the dump on the corner she would stay in bed until midday when the sunlight hit her room. It was too cold to get up and more so a lack of incentive too. She felt completely defeated and it was a struggle to hear her friends say how lucky she was to be getting her house rebuilt and looking like brand new. The same friends who wouldn’t even want to visit her because of the state and dirtiness of the current home. Lucky was the last feeling that she felt in this moment.

It all began in November of 2018, around 3 months after Tetyana and her sister got back from their 8-week Europe getaway. A life changing call received at work was initially nothing more than a perceived practical joke. There had been a major house fire and confirmation that her pets were alive was all that mattered on that phone call.

Before she knew any other information, she was welcomed home by a swarm of police cars, vans and media crews taking photos of the burnt wreckage. Anything Tetyana once knew was melted and destroyed. Too many questions and fear consumed her mind as she just stared at the mess of exposed beams and a fallen in roof. It was a carcass and the guts that were her belongings had been ripped out.

Whilst this event is so tragic, it isn’t exactly an unlikely occurrence. In 2016 alone, ACT firefighters estimate that around $6 million was lost due to housefires in Canberra. A study conducted last year by Macquarie University and the Bushfire and Natural Hazards Co-operative Research Centre into house fires, showed that more Australians died in residential fires compared to all other natural hazards.

Household fires may just be a freak accident that seems too improbable to happen to you, but it became a quick reality that day for Tetyana.

By 10pm on the day of the fire, her insurance company was still unable to find her adequate accommodation. Kind neighbours offered to home Tetyana and Leyland as he couldn’t stay in a hotel and they wouldn’t pay for him to be homed. Having a pet is not a rare situation and to Tetyana that was her family and was just as important to be with him.

If only she knew that the day of the fire was the easiest one she would have in the next two years.

Tetyana moved to the dump of a house around the corner from her original home. She was told the construction would take around 6-7 months. She says that this timeframe was the only justifiable reason worth staying there, which proved to be terribly inaccurate.

Tetyana is a woman in her 60’s who lives alone. She had spent a large sum of money while in Europe and had no more paid leave at her part time retail job. A quote of $30,000 for rubbish removal was what forced her to sort through and salvage what she could with her very own hands. She doesn’t have much strength or really know what to do, but she is not a woman who is made of money.

For a long time, no work had even begun. She was constantly contacting her insurance company requesting different builders. The requests got nowhere as they use the same building companies nationwide. Communicating with the company was essentially impossible as their head office has closed down in Canberra. On the other end of the line was a woman in Hobart 22 hours away who knew just as little as she did.

It was 6 months in and Tetyana had unknowingly chewed through half of the time that the insurance company was willing to pay for her temporary home. No work had even started on the house yet, and the builders had gone through two different head coordinators already. Their excuse was that they were ordering parts. The parts that weren’t even correct in her like for like policy which were needed for the heritage listed home anyway.

Once work on the new house began, problems and drama followed.

Nothing was ever consistent with the builders. When work was done it was rare, and there was no opportunity to speak to the same person.

She would arrive home to see them often installing incorrect items or using much cheaper quality than agreed on. They would make continuous errors including installing a wall oven on the floor. They would fit flammable material surrounding the fireplace, which scared Tetyana the most. Every wardrobe or curtain fitting was wrong every single time. This meant non-stop calls to the insurance company who did nothing for the situation and extended the build even longer.

So much of her time was taken up with working on this house. Taking photos for evidence, making calls and even purchasing materials on behalf of the builders who didn’t always reimburse her. Quite often she had to take unpaid leave to meet the demands of the situation and still ended up being out of pocket and throwing away money.

Call after call happened and she was never being heard. The insurance company would say that everything is fine and they have contacted the builders, yet nothing changed.

“There would be 2 weeks of activity and 10 weeks of nothing. In that 2 weeks of activity every time I had to organise a meeting with the coordinator and the insurance inspector.”

Any time that work was done to the house, there was no sort of inspection of quality. There was no review of the work that had been done unless she had something to complain to the company about. These meetings of the house became a frequent thing which was extremely time consuming. She felt too powerless over the phone as she was always told that nothing was wrong.

While this may be just Tetyana’s experience, data and online reviews may point to a larger problem.

The Australian Financial Complaints Authority (AFCA) was established in late 2018 and is a non-government and not for profit organisation who offers assistance with any type of financial disputes, including insurance. Within this time, they have solidified their position as a company as they have received 80,546 complaints and approximately 621 calls per day since July 2019.

In the same year of Tetyana’s housefire, there was 2421 complaints for home contents and home building insurance. In the same period there was also 2023 complaints for delay in claim handling and 666 for the service quality.

In an AFCA report, Tetyana’s insurance company was listed as having the most general complaints from late 2018 to mid-June 2019. The largest percentage of the complaints was also on home building insurance.

Tetyana’s experience was unlikely an isolated incident. In November 2018 – June 2019, home building was the second highest category for complaints.

It’s also interesting to note that the two joint building companies have some unpleasant online reviews from not only customers but employees. Many reviews were so similar you could believe it was Tetyana writing it herself.

“… just painful to deal with the whole time. I have had countless days where I took time off work and nobody turned up. The quality of some of the works that are complete are shocking to say the least” said Mario.

“We are currently on our third site manager. Things started happening… very slowly. One day’s work would be done and then no one would come to the house for two or three weeks” from Matthew.

Review after review acknowledge the trends of the same insurance and building companies, clearly with no improvement. Constant managers changing, delay in work, unprofessional, relentless mistakes and overall lack of communication skills. Review websites are flooding with other cases that describe Tetyana’s situation all over again.

In my talk with Tetyana she mentioned that the builders told her that nobody questions their work, that all the other elderly people just accept what they do. This similar outlook was displayed on website such as Glassdoor, Product Review and Seek as well. An ex staff member suggested that you only do well within this building company ‘as long as you are a yes man’.

Tetyana didn’t complain to any higher authority, as she often felt helpless at the end of any communication with the companies. She didn’t want the process to become longer or have to wait for someone new for the job. Exhausted and overwhelmed became her new normal and unless she created a massive fuss for a meeting, this would continue for months.

When viewing the insurance company’s website terms and claims process, she was definitely more than entitled to complain. They describe their claims as an easy procedure and specifically mention that they will source all materials and items and have regular communication with clients. None of this was delivered and we see this through Tetyana and countless other experiences of these same companies.

Stress began to wear Tetyana down. Each day was spent by being asked for more money and seeing a lack of results. Eventually she had to visit a psychiatrist. She was alone with her animals living in the awful accommodation. She could barely go to work and was rapidly losing money and any motivation.

“She was horrified by the way I’ve been treated. She said she would be feeling the same way that I was. She told me there wasn’t much she could do except give me drugs and I didn’t want to take drugs.”

This would continue until the 1^st of January 2020, it was finally moving in day.

Her excitement to get back to a place that finally felt like home was a relief compared to no other. After living in such an abysmal place, she finally started to feel lucky and hopeful.

This liberation was cut short once realising what she had arrived too. It wasn’t the comfortable homely place she expected to move back into. The house was still inhabitable. It had no electricity and no water.

Tetyana sat in her home for two days, unable to go to work, just trying to survive with no power or water. It was the middle of summer and almost reached 40° that day. A builder with an ounce of pity in his body which every other worker had lacked up until now, came on the third day to provide her with a small bit of hope. Unsurprisingly, that feeling did not last long.

Refusing to sign the certificate of occupancy on the 1^st of January was the best thing Tetyana could do. Faults continued to appear, and the house still seemed like it would never be completed. Hard times continued to be thrown her way and with no help but her own strength she continued to push through it.

After speaking to Tetyana about her experience she had only just signed the certificate of occupancy a few days prior. This turned out lucky as only a few weeks ago a whirligig tore through the roof as no screws were ever put on in the rebuild. It is things like this that make her feel defeated.

No final inspection of the house was ever done. This causes Tetyana much grief as she no longer feels safe in her home, especially due to the fire.

There’s a lot more work to do and the heritage listed home no longer feels or looks how it used too. She is at the point where it is just easier to give up. The lack of support from anyone and stress throughout this has affected her immensely. Whilst she says it will take her a long time to feel happy again, it’s an experience she would never wish on anyone else. When researching into these companies, I’m sure it is a shared experience. That feeling of home that she had in this house for 15 years is a sense that she is unsure she will ever get back.