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Insurance policyholders covered under the Financial Claims Scheme

In the unlikely event that a general insurer fails, if the Australian Government activates the Financial Claims Scheme (FCS) most policyholders will be covered under the FCS for claims up to $5,000. Other persons or third parties may also be able to claim under certain eligible policies with the affected insurer under the FCS. There are some policies that are excluded - see the General insurer FAQs.

In addition, the following policyholders with the failed general insurer will be covered under the FCS for claims of $5,000 and above:

  • individuals who are Australian citizens or permanent residents

  • non-resident individuals who have insured against risks located in Australia

  • Australian-based small businesses, as defined under the Income Tax Assessment Act 1997

  • Australian-based not-for-profit organisations

  • trustees of Australian-based family trusts

Insurance policies held by medium and large businesses are covered under the FCS for claims up to $5,000.

The FCS also applies to certain third parties who are able to claim against a general insurer under a policy issued to another party by that insurer.

The FCS does not apply to policies issued by life insurance companies or private health insurance companies.