20,000 Australians demand the end of unfair insurance: Canberra

“Stand up to the insurance lobby” – that’s the message of leading consumer groups as they deliver signatures of over 20,000 Australians to Parliament House in Canberra.

The groups anticipate the Federal Government to act on “Unfair Contract Terms” laws this fortnight, closing a damaging loophole that has allowed insurance companies to profit by using confusing, tricky and unfair clauses to evade or reduce claims.

One of the most galling examples occurred after Bushfires tore through Wye River, Victoria on Christmas day in 2015, destroying 116 homes. As the Banking Royal Commission exposed, AAMI ads promised to repair or rebuild damaged homes “no matter the cost to us” but when residents went to claim, AAMI used a loophole to reduce their costs by offering less cash than what it would cost to rebuild their homes.

Consumer groups say the Government must implement the laws as recommended by the Banking Royal Commission.

“Under the current law you’ve got more protection with a gym contract than with your home and contents insurance. There’s no justification for having clauses that are clearly unfair in insurance contracts. After AAMI’s actions following bushfires in 2015, the urgency of these laws cannot be understated,” says CHOICE CEO Alan Kirkland.

“Australians deserve fair insurance they can rely on when they need it the most. We welcome the Treasurer’s commitment to follow Commissioner Hayne’s strong recommendation,” says Alix Pearce, Director – Policy & Campaigns at Consumer Action Law Centre (Consumer Action).

“In particular, we support the Government’s proposed narrow definition of ‘main subject matter’ to make sure all of the fine print has to pass the fairness test. For years, powerful insurance lobbyists have been stalking the halls of Parliament trying to block or water down this important reform.”

CHOICE and Consumer Action have also expressed concern that people with group insurance in superannuation and people who have “complimentary” travel insurance with their credit card will likely be left behind by these proposed reforms.

The groups say the Government must review other industry carve-outs further.

“There are unfair terms riddled throughout group insurance in superannuation and complimentary travel insurance offered by banks. Enough is enough with insurance industry carve-outs,” says Kirkland.

“No industry should get special treatment to be unfair.”


Consumer Action – 0413 299 567, media@consumeraction.org.au

CHOICE – 0430 172 669, media@choice.com.au



In October 2019, CHOICE awarded the entire pet insurance industry a Shonky award. Expert reviewers found contracts riddled with unfair terms and conditions.

Consumer Action’s submission on the exposure draft legislation is available here.


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