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The Insurance Law Service helps disaster victims take on insurers. Now it faces a big fight of its own

By consumer affairs reporter Liz Hobday and the Specialist Reporting Team's Brooke Wylie, Saturday February 29, 2020 - 11:10 EDT
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Else Seligmann and Andrew Gardyne's property was hit by two disasters in three months. - ABC

When Else Seligmann and Andrew Gardyne packed up their home to move to the country, they hoped for a simpler life.

They didn't expect to have to shuffle across a plank each day to reach the outside world.

But barely six months into their tree change, that has been their reality.

In November last year, bushfires ravaged the tiny community of Caparra, near Wingham on the New South Wales Mid North Coast.

"We had no water, we had no electricity, we had no internet, we had no phone, landline or mobile," Mr Gardyne said.

"We were unable to get out."

Of the 36 homes in the Caparra district, 11 were destroyed in the fires.

"It was devastating, absolutely devastating, to people who thought they could defend their homes and couldn't," Mr Gardyne said

He managed to save his home, but the fences, tanks and roofing were badly damaged.

So were the timber logs supporting the bridge they depended on to cross Caparra Creek and access their property.

And there was more to come.

Almost three months after the fires hit, the rain came, flooding Caparra Creek.

The bridge, or culvert, that had caught fire months earlier was completely washed away.

Insurer apologises after fight

After the second disaster, the couple could only leave their property by walking across a three-metre plank, or using a tractor to tow their car through the flooded creek.

"I have balance problems, so I had to be helped to cross the plank. And I almost fell in a few times," Ms Seligmann said.

"And then Andrew had to drag my vehicle backwards through the creek with the tractor so that we had a vehicle on the other side to go to town."

Their insurer, NRMA, agreed to cover some of the damage to their property. But it initially refused to cover the $70,000 bill to rebuild the culvert.

"We're paying $4,000 a year, premium-level insurance, and we can't access the property. We can't leave our property. What's their thinking?" Andrew said.

Ms Seligmann contacted half a dozen different organisations for advice before the Insurance Law Service agreed to help.

Its lawyers helped the couple draft a formal request to NRMA to reconsider their decision.

Late last week, NRMA agreed to pay the entire claim.

NRMA says it has apologised to the couple for the distress caused by its initial decision.

"A quote for the repairs to the culverts and driveway is being prepared and we'll provide the settlement for this as soon as possible," a spokesman said.

It's a pleasing outcome for the couple. But the service that helped them now faces its own fight.

Lawyers who take on insurers face the sack

The national Insurance Law Service, which offers some of its services for free, said it had been overwhelmed by calls for help after six catastrophes were declared in the past five months.

On average, the service, run through the NSW Financial Rights Legal Centre, deals with 65 calls per day.

But it's nowhere near keeping up with demand, CEO Karen Cox said.

"This is not just bushfires, this is hail, this is storms … and there's no indication that this is going to ease up," she said.

The service will have to lose five lawyers — almost half of its staff — by the end of this year, she said.

"If we are answering 40 to 60 per cent of calls now, what are we going to do with half the staff?"

In recent years, about half of the funding for the service has come from the corporate regulator ASIC, through the fines it has imposed on corporate wrongdoers.

But since the banking royal commission told ASIC to fight more of its cases in court, the regulator has been less inclined to use these so-called enforceable undertakings.

So, with ASIC increasingly choosing to prosecute rather than penalise, there is less money available to consumer legal services like the Financial Rights Legal Centre in NSW, and the Consumer Action Law Centre in Victoria.

The service is also partly funded by the Federal Government, but that funding agreement expires on June 30.

The Attorney-General, Christian Porter, said the Government was negotiating a new deal with the states and territories to fund legal services from July.

"As part of that, the Government has increased funding by an additional $75 million over five years to increase frontline support to Australians who need legal help in times of need, as well as reversed forecast reductions that would have amounted to $150 million over five years," he said.

Ms Seligmann said the service did incredible work, and without it they would still be stranded. She wants to see its work continue.

"Doing something on your own is really difficult," she said.

"I've seen so many people just say 'it is as it is' and let things go. We can't afford to let it go."


© ABC 2020

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