Does your insurance cover you as a caregiver?

If you haven’t told your insurer that you are a caregiver, it may impact on future claims.

As we all know, when we invite a vulnerable child into our home – there are multiple challenges and rewards. There is also a lot to organise at the start! During the settling in period, it can be easy to overlook things like notifying our insurer about the new member(s) of our household. But, it is very important we do.

We asked the Insurance Council of NZ to explain why.

Fostering Kids NZ: Why is it important foster/permanent caregivers declare to their home and contents insurers that they are caring for a foster child or providing a permanent placement?

Insurance Council of NZ: Most insurers will be happy to extend cover for contents owned by foster children if you ask for cover to be extended. The reason for contacting your insurer is that contents owned by children living in your home may not be automatically covered under your contents policy. Under many contents policies, the definition of who is insured (e.g. “you” or “Insured person” in the policy) will extend to members of your immediate family or “your children” living with you, but may not extend to children in a non-familial relationship. Similarly, under other policies (e.g. where the person insured is named as the adults in the home only), the definition of “contents” may extend to contents owned by members of your immediate family or “your children”.  Generally, insurers would consider any child permanently living with you as a member of your immediate family, provided you are the legal guardian of that child while they are in your care.

Fostering Kids NZ: How much detail should caregivers provide to the insurer about the child’s history?

Insurance Council of NZ: Insurers look at risk and so in general terms are interested in history related to damage to property or dishonesty.  The questions an insurer would ask and the level of information expected to be provided to the insurer will be no different for a foster child than the questions for any other insured person. In order for any person to be covered by the policy, insurers would typically require the following information to be disclosed to us about that person:

  • Any criminal convictions in the last seven years
  • Any previous losses (whether an insurance claim was made or not) in the last five years
  • Any insurance declined or cancelled, claim declined or special terms applied to any policy in the last five years

Some insurers require this information to be provided about any person living in the home, not just people to be insured by the policy, as this may increase the risk of a loss happening in the future.

Fostering Kids NZ: How is this declaration likely to impact on any claims they may make in the future?

Insurance Council of NZ: Provided all information is disclosed to insurers, they would take this into account in setting the terms of cover up-front. If the disclosures made have any impact on the terms provided, the foster parent will be advised up-front whether or not they might impact a claim. The fact that a foster child is living in the home will not typically result in any special terms being applied to policies. Insurers would only apply special terms if any of the responses to the standard questions were unfavourable.

If insurers find out after a loss has occurred that these questions had not been answered truthfully (or not answered at all where it was required), then insurers’ policies do allow them to decline a claim and/or void the policy.

Fostering Kids NZ: How do insurers view damage that is caused by a child who is showing the effects of abuse and neglect? Are they viewed any differently to anyone else?

Insurance Council of NZ: This would have absolutely no bearing on an insurer’s position. The important thing from an insurer’s perspective is to identify whether or not the damage is covered under the policy. All policies exclude intentional damage caused by specific people – for example “intentional damage caused by any person living in the home” or “intentional damage caused by you, your spouse, or any member of your family living with you”. To clarify, any damage caused accidentally by a child, whether abused or neglected or not, would not be expressly excluded by a policy. 

If you are a foster caregiver and your claim is rejected by your insurance company – ask Oranga Tamariki (formerly CYF) to help.

Oranga Tamariki has the following advice for caregivers: “Caregivers should be insured for those risks which are generally insurable and that they avoid damage where damage is avoidable.

The Caregiver Claims for Deliberate Damage Scheme has been operating since the 1st July 2005. It was set up to recognise that caregivers’ insurance will generally not provide insurance cover to property as a result of deliberate damage by children and young persons in the custody of the Chief Executive placed with a caregiver.  The scheme is funded by the Ministry and the costs are from the site budget responsible for the financial support of the young person.

The Ministry still requires the Caregiver to have insurance cover over their Home and Contents that should include coverage for accidental damage and all potential claims should still be reported to the Caregivers own insurer in the event of a loss.  If the Caregivers insurer declines their claim then a claim can be considered under the Deliberate Damage Scheme and the required forms are then completed together with written confirmation from that insurer that the claim was declined, as proof”.

If you are a permanent caregiver and your claim is rejected by your insurance company – you should talk to the Permanent Caregiver Support Service.

Permanent caregivers are NOT covered by the Caregiver Claims for Deliberate Damage Scheme. All requests for additional support by permanent caregivers must now be directed to the Permanent Caregiver Support Service – which was set up on April 1 2016. It replaced the old system where permanent caregivers had to get court orders to secure Government funding for specific needs.

Have you had problems around insurance claims?

If you’ve had bad, or good, experiences with insurance claims we’d love to hear from you. It helps us build an accurate picture of how the insurance industry and Government agencies are supporting the needs of caregiving families.

Email us with your story here.

 

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