About 13 complaints from Exmouth residents have reached the Australian Financial Complaints Authority after Cyclone Narelle in March. Residents say they struggled to get proper compensation from their insurers. Now, the authority is urging locals to be cautious when an insurer offers a cash settlement.
The Warning
The message is direct: take care before accepting the money.
Lead ombudsman Emma Curtis said insurers must account for the shortage of locally available trades and materials when they provide settlement quotes. Her point is practical: a quote that looks reasonable on paper means little if the people and supplies needed for the work aren't available to hire or buy in Exmouth.
The authority's account doesn't name an insurer or give a dollar figure for the shortfalls residents describe. What it does confirm is the number of complaints: roughly 13, all tied to how locals fared with their insurance companies after the cyclone.
The Choice in the Homeowner's Hands
A cash settlement puts the decision, and the risk, in the policyholder's hands. Take the payout and you're responsible for organising repairs yourself. That can suit people who know what the job will cost and can find the labour to do it. It's a harder deal when tradespeople and materials are in short supply.
Curtis placed the burden squarely on the individual's judgment. She said people should think carefully about whether they could complete repairs for the amount offered. It's a simple test, and a sensible one. Before signing, homeowners have to ask whether the figure on the table actually covers the work needed, given what's available locally.
Residents who felt shortchanged took their grievances to an independent complaints body instead of waiting for new rules or fresh intervention. The complaints process is being used. The 13 complaints show that.
What Insurers Are Expected to Do
Curtis's expectation for insurers is specific: they must factor local conditions into their quotes. A settlement offer that ignores the scarcity of trades and materials in a remote community isn't a realistic assessment of repair costs, and the authority is signalling it will examine that.
For insurers, the lesson concerns the integrity of the product they sold. Customers pay premiums for a promise that they'll be put back on their feet after a disaster. Cash offers that don't reflect local reality strain that promise.
Why This Matters:
The Exmouth complaints show how a contract can fail after a disaster, even when no one disputes that the damage happened. A cash offer works only if it matches the real cost of rebuilding in that place, at that time. Curtis's advice reinforces personal responsibility: homeowners must weigh the offer against what they can actually deliver. Her expectation that insurers price in local shortages reinforces accountability on the other side of the contract. From a market perspective, clear obligations enforced through existing complaint channels may serve residents better than new layers of intervention. The 13 complaints will test whether that route delivers.