When it comes to insurance, some common issues keep causing problems for New Zealand customers. A study released on Monday by Consumer NZ found only 13 per cent of people were confident the industry could be trusted. Only 8 per cent thought insurers always offered fair terms and just 18 per cent said they fully understood their insurance policies. One in four people had had a problem with an insurer, and that was most often related to a claim having been declined. The Insurance and Financial Services Ombudsman deals with the bulk of complaints that insurers cannot resolve themselves. READ MORE: * Insurance claim for jewellery turned down due to open window * Dealing with insurers over homicide-related claims can be grim for landlords * Why do insurance customers have to pay excess? Ombudsman Karen Stevens said policy exclusions were the most common cause of complaint the scheme received. Insurance policies often exclude cover for certain scenarios and events, but some people may not realise that until they come to claim and read the fine print. Other issues recurred, too. Gradual Damage If an insurer thinks that a problem developed over time, rather than as the result of a one-off incident, it usually will not pay out. Peter Banks discovered this six weeks after he bought his home in Woburn, Lower Hutt, in 2016. “The sink dropped straight down into the cupboard when it was filled with hot water one night. The water want all over the kitchen floor and into the hallway carpet,” he said. “I rang the insurance company there and then and they organised someone to come out and clean up the water. The sent a valuer on the Monday to check it and he told me they wouldn’t cover the problem due to lack of maintenance. How do you maintain a marble-top sink?” Proof of loss An insurance policy will only pay out if the person who owns the policy can prove they have suffered a loss. Banks said he encountered this issue after the Kaikoura earthquake in 2016. While there was no damage to the house, some family heirlooms were broken, including glass and china items from when relatives first arrived in Petone in 1840. “I was a bit upset but realised these things happen and we were fully insured for house, contents and three cars. “I rang [the insurer] the next day and they asked me to list all the items, which I did and sent them to them. They then asked me to get prices, so we went to our local antique dealer and they estimated they would charge us between $5000 and $10,000 to value and visit our home. [The insurer] told me to use the internet to find and get prices. We spent one or two weeks getting this.” Two or three weeks later the insurer said it needed photos of the items on eBay. “When my wife went back to eBay and most items had disappeared. I rang [the insurer] to let them know and they said they won’t pay out without values.” Scope of Cover Another reader, who wanted to remain anonymous, said it took him three months to get $33 from a travel insurance claim. “Part one of our flight to Australia was delayed, meaning we missed our connecting flight resulting in lost accommodation which we had pre-paid,” he said. He had bought insurance when he purchased the airfares online. The airline said he had to contact Webjet about the claim. Webjet said the insurer had to deal with it. The insurer said he should try the airline. “We put in a claim to [the insurer] and after dealing with multiple customer service staff and lots of to-ing and fro-ing, repeatedly sending the same information that seemed to go missing, our claim was declined, despite it meeting the criteria of unforseen circumstances. “I called [the insurer] and spoke to a customer service representative who confirmed ‘yes, you would be covered’ so back to the emails. Our claim gets elevated to a manager for review who requests all of the information to be sent again and again ‘the decision can’t be overturned’.” He asked for a review and was eventually paid out $33. “Both of us bought policies, we got charged an excess worth more than the policy, which is mind blowing in itself, it really just discourages people from claiming, and got a measly $33 back which they denied and denied and fought tooth and nail to avoid.” Excess Some customers find it hard to accept that they can be charged an excess even when a claim is not their fault – and for each instance of damage. Jethro Hooker took out landlord protection on a rental property in Manurewa, which he said was wrecked by tenants. “We also had a property manager that supposedly was managing and looking after our property but proved to be useless. After the tenants stopped paying the rent it took us three months to get them evicted and once we finally got possession of the place, we found it in a deplorable state. “The property was newly renovated with new carpet, painted walls when we gave it to them but was completely wrecked when we got it back, including inside house, outside house, garage and gardens. We claimed through our landlords’ insurance but they denied us cover for two reasons “Firstly each individual bit of damage was considered on its own merits and required its own $550 excess. Secondly they denied us because apparently our property manager couldn’t provide physical proof that they conducted reference check on the tenant, only verbal.” Consumer NZ has called for change to the insurance sector, including a one-page document explaining insurance policies to customers, the end of commission for insurance advisers and making insurance subject to the Fair Trading Act’s ban on unfair contract terms.