ASIC warns cash payouts on cyclone home claims leave many Australians under-compensated

ASIC’s latest report on Cyclone Jasper damage claims reveals that cash settlements dominate the market, with five leading insurers accounting for the majority of payouts. More than six-in-ten final claims were settled in cash, and for IAG and Allianz the figure exceeded eight-in-ten. These cash offers are usually derived from a single estimate supplied by the insurers’ preferred contractors, often featuring discounts unavailable to homeowners.

When the quoted amount proves insufficient, policyholders are forced to source their own builders, oversee the work and fund any remaining expenses. The regulator noted that insurers rarely explain why cash was chosen, and some failed to inform customers of their right to reject a cash settlement. Although no breaches of law were found, ASIC warned that better pricing practices and clearer communication are needed to protect vulnerable Australians.