Insurance policies can be used to perpetuate domestic violence: What you need to know

Worried woman looking at insurance documents on phone to insurance company.

Rates of domestic and family violence in Australia have risen in line with pandemic lockdowns. Researchers from the Queensland University of Technology Centre for Justice surveyed 362 domestic family violence (DFV) agencies in 2020 and found almost two thirds had seen an increase in people seeking assistance.

While research and discussions around DFV are becoming more prominent, many reports suggest physical violence within intimate partnerships and family relationships dominate awareness. While this is understandable due to the threats faced in these circumstances, it may mean less visible violent and controlling behaviours like psychological and financial abuse remain under the radar.

According to domestic violence helpline DVConnect, financial or economic abuse occurs when someone uses money or things related to personal finances to hurt, intimate or control another person. It could involve actions like taking away access to bank accounts, limiting communication and transport that enables someone to work or study, or even taking out loans in the victim’s name.

A new report from Allianz Australia has also highlighted how insurance policies can be used by domestic violence perpetrators, and that many Australians don’t understand how this might occur.

Allianz commissioned a survey through YouGov for the report, which found 78% of respondents didn’t fully understand the risks associated with insurance products in situations of family violence. 

Of the 1,038 people surveyed, 41% didn’t know why they might need to tell their insurance provider if they were experiencing family or domestic violence.

How could someone use insurance in a domestic violence situation?

It can often be difficult to detect signs of financial abuse –  it may start with minor actions and increase over time to involve more manipulative tactics. When considering how insurance policies might be used in this process, harm or control can be inflicted in a number of ways. 

If a partner’s name is listed on an insurance policy you hold jointly, they may be able to:

  • Change the amount your home or car is insured for, or cancel the policy without you knowing.
  • Take your name off the policy.
  • Change the address listed for your home or vehicle.
  • Get access to your address details.
  • Demand half a claim payout.

These actions could impact you if you need to make an insurance claim, which may leave you facing financial hardship at a time when you’re already vulnerable. It could also provide a violent partner with your location. 

It’s also important to remember an insurance claim may be rejected by some providers if your property was intentionally damaged by someone listed on the policy. 

How can you prevent someone from misusing your insurance?

In line with its report, Allianz has developed a toolkit for insurance and family violence. If you’re experiencing DFV, the toolkit suggest you:

  • Contact your insurance provider and tell them about the situation.
  • Talk to them about separating your insurance policies from an abusive partner (only if it’s safe to do so).
  • Ask about additional support, and the process for making a claim for damages caused by DFV. Some insurance companies take exceptional circumstances into account and may still grant your claim even if the damage was caused intentionally by an abusive partner listed on the policy.

Allianz Australia’s Sema Musson said the company wants customers to feel safe and supported by insurance providers. 

“A home or a car are often people’s most important financial assets, and we need to ensure there is information and specialist support available to help victims protect these assets so they’re not left financially ruined by perpetrators.”

The cost of escaping domestic violence

In 2017, the Australian Council of Trade Unions calculated that it costs an average of $18,000 to leave a violent relationship. This takes into account costs related to finding accommodation and going through the court system, and equates to 141 hours dedicated to these tasks. 

The government’s $5,000 Escaping Violence Payment was rolled out earlier this year to help reduce the financial barriers many face when attempting to leave a violent partner or household. But this isn’t a crisis payment, so those considering applying for this support should be mindful that it could take time to access it. 

While all employees in Australia are entitled to five days of family and domestic violence leave, workplaces aren’t required to pay you during this leave period (although some may choose to do so).

If you think that you or someone you know is in an abusive relationship, call the National Domestic Family Violence and Sexual Assault Counselling Service at 1800 737 732 or 1800RESPECT for support and advice.

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