Councils Outsource Claims, Deny Valid Payouts

0:00It's March 20th in Sydney, let's get into the news. A new report from the Victorian Ombudsman exposes how Melbourne Council's higher private contractors to handle small compensation claims, often paying, out as little as 8%. These claims cover property damage like fences cracked by tree roots or driveways ruined by neglect, plus injuries from potholes and uneven footpaths, all under the Council's insurance excess of up to $50,000. More than half of Victoria's 79 councils outsourced this work to firms not always regulated by financial watchdogs. The contractors act like independent experts but prioritize saving council money, denying valley claims even when liability seems clear. Residents face tough tactics, including confusing letters and no info on appeal rights. One woman who blacked out from a footpath, fall and broke her glasses, got her $906 claim, rejected over an arbitrary threshold. Another battle to year for fence repairs, settling for $5,115 far below quotes.

1:03The Ombudsman calls the problems widespread but won't name councils, drawing fire from rate-payer groups who say it's unconscionable. Council leaders defend it as standard practice but pledge better communication, while opposition figures demand claims be judged on merit. Several councils have agreed to overhaul their handling, with one big metro area set to manage claims in-house by June 2025. This shift might finally ensure fair deals for everyday folks hit by council slip-ups.