Ms W took out life insurance with her bank when she applied for a loan to buy a property. When she subsequently took out another loan for a second property, the bank didn’t proactively advise her to review her insurance cover. Six month later, while pregnant, she decided to review it but the bank wouldn’t increase her cover because she had developed gestational diabetes. A bank staff member told her the bank had failed in its duty of care to review her insurance so she raised a formal complaint with the bank.
The bank didn’t respond to her complaint so she brought it to our office. Because her bank had not responded within three months of her complaining to it, we were able to investigate without referring the complaint back to the bank’s internal complaints process.
By the time we got involved, Ms W had given birth to her baby and we asked the bank to reconsider her insurance application. It did so, but found there was a family history of diabetes and Ms W had had a medical investigation into genetic diabetes before she purchased the second property. The bank said that if she had asked to increase her insurance at this point, the genetic investigations would have been revealed and it may have decided not to increase the insurance.
We told Ms W that despite what she was told, the bank had no duty to proactively review her insurance – this responsibility is the customer’s. However we acknowledged that the bank had misinformed her about the nature of its duty in this regard, resulting in her spending time pursing the complaint. The bank offered Ms W $250 in recognition of this, which Ms W accepted.