Insurance products need redesigned to be abuse-proof, says CWES

A new report from the Centre for Women’s Economic Safety (CWES) is tackling domestic violence from an unexpected angle: the insurance industry. The report suggests that by redesigning insurance products, we can provide a new layer of protection for women against financial abuse, a subtle yet damaging aspect of domestic violence.

Chief executive of CWES, Rebecca Glenn says abusers are using ‘a wide range of tactics’ to manipulate insurance products, like home insurance and car insurance, to cause harm to their victims. 

“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,” Glenn explained.

She also described a fundamental flaw in the way insurance policies are designed.

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

What the report suggests

The report, named Designed to Disrupt, suggests 19 ways insurers can close the loopholes that currently allow financial abuse to thrive. These include: 

• Preventing unilateral policy cancellations
• Adding clauses that enable victims to claim for damages caused by perpetrators, and 
• Modernising laws to ensure insurance products offer protection against financial abuse. 

Report author and UNSW School of Social Sciences Adjunct Professor Catherine Fitzpatrick believes by making these changes, insurers can offer a safety net to those at risk of or experiencing financial abuse.

"The Insurance Contracts Act 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,” Fitzpatrick said.

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

The impact of financial abuse

Financial abuse is a control method in domestic violence, restricting a victim’s access to economic resources. This abuse affects millions, with an estimated 1.6 million women experiencing economic abuse in their lifetimes, leading to a direct cost of $5.7 billion annually to victims.

On International Women’s Day, CWES is challenging insurance companies to assess how their policies can help fight domestic financial abuse. They're urging the industry to step up and integrate financial protection measures into their products.

And remember, if you or someone you know is dealing with domestic violence, 1800RESPECT offers confidential support.