Vlad Chudoschnik, 71, and his wife, Rhonda, have insured their motor vehicles with Budget Direct for over a decade.
So when their twin-cab ute was dinged during a caravanning trip to Queensland last year, they thought it would be a straightforward process to make a claim.
"The vehicle was parked in front of our caravan. A fellow leaving the caravan park was going too quickly and clipped the corner of the roo bar," Mr Chudoschnik explained.
The ute only had minor damage.
But it soon became a major headache.
After notifying Budget Direct, the couple was told there were two claims on their file on the industry's central database (the Insurance Reference Service).
Mr Chudoschnik was aware of one claim related to his home insurance but did not know what the second claim referred to.
"They said the prefix of the claim starts at RAC, so we suggest you contact the RACV. I said we don't have a policy with them – that's when the chase started," he told ABC News.
Despite the damage to the car clearly being the fault of the other driver, Budget Direct would not arrange to fix the car until Mr Chudoschnik paid the excess on his insurance, which he refused to do.
What followed was hours and hours of phone calls and research over a period of three months to try and discover the origins of the claim.
Eventually, Mr Chudoschnik discovered it was a claim he had lodged regarding his caravan but had been rejected.
But, unfortunately, there was an administrative error and the case had not been closed – so it was still showing up on the central database.
"I was very disillusioned with the insurance company," Mr Chudoschnik said.
"I requested they remove this claim, they said they can't."
He almost gave up but was worried his premiums would rise if this case was not closed.
"I felt like I was back at work and not being paid," lamented Mr Chudoschnik.
Insurance data-handling errors
The Financial Rights Legal Centre said poor data handling is rife throughout the general insurance industry (which covers things like building, home contents and motor vehicle insurance).
"Our research has found the data-handling practices of insurers and their central database is not up to scratch," senior policy officer Drew MacRae said.
"It's error-ridden, it's very difficult to access, inconvenient and unreliable."
This can affect consumers' future claims and even disclosure requirements (which may mean insurers can later deny a claim).
"When you purchase an insurance product, you need to disclose your prior insurance claims and any other incidents," Mr MacRae said.
It is hard to have this information at hand and remember it correctly, so the insurance industry offers to send you your insurance history by spending $22 on a report from the central database.
The Financial Rights Legal Centre said the insurance industry has an opportunity to lift their data standards with the expansion of the Consumer Data Right (CDR) to the general insurance sector.
The CDR's aim is to make it easier to switch products by having the right to share data between service providers.
A spokesperson from the Insurance Council of Australia said it is: "Well-advanced in a significant data improvement program in 2022 to address IRS [Insurance Reference Service] data quality and consistency across the 16 insurers, that will address many of the points raised in the FRLC report."
It also acknowledges a need for engagement and new policies around the proposed introduction of the CDR to general insurance.
In a statement, Auto and General Holdings, which owns the Budget Direct brand, said: "We don't assume the accuracy of IRS listings, they are simply used as a prompt to discuss key information with our customers and to understand circumstances more efficiently."
It added that it would not discuss individual customer claims.
Eventually, Mr Chudoschnik was able to find out which company had the insurance claim open and ask them to amend its records.
Budget Direct did finally arrange to fix his vehicle.
"The advice is: don't give up," was Mr Chudoschnik's suggestion to others in his situation.
"Be prepared to do some homework and don't just take the insurance company's view."
