Fair go in insurance

If anything positive can be drawn from the devastating natural disasters that hit many Australians in early 2011, it’s that the public and the government are starting to ask more questions about our insurance law and policy settings.

In February, a coalition of consumer and insurance law experts including Consumer Action released a twelve point plan “A Fair Go in Insurance“, which set out the current problems with insurance in Australia.  You can read our media release here.

One of these points calls for insurance contracts to be covered by Australia’s new national unfair contract terms law – this law requires all other standards form contracts that businesses sign with consumers to be fair, but insurance is excluded because of a legal technicality. You can see our submissions on this issue to the Senate Economics Legislation Committee inquiry into the Trade Practices Amendment (Australian Consumer Law) Bill 2009 and the Unfair Terms in Insurance Contracts options paper.

This Online Opinion article from March 2011 has more detail on our concerns about non-insurance, under-insurance, and the need to make insurance accessible for low-income consumers.

Reform underway

This year the Australian Government has committed to significant insurance reform, including a number of measures that Consumer Action has called for through our submissions and twelve point plan.

After the January floods, the Minister for Financial Services, the Hon Bill Shorten MP, began working with insurers and consumer groups to develop a standard definition of ‘flood’ for insurance contracts, and to require insurers to provide potential customers with plain English summaries of policies, which will help more people understand their insurance policies before they buy.  The Government is also pushing to ensure insurers allow consumers to pay their premiums in smaller, fortnightly instalments to make insurance more accessible to low income  consumers.

In March, we welcomed the Australian Government’s announcement that it will conduct a review into disaster insurance in Australia after many Australians found themselves without insurance or with insufficient cover to replace what was lost during the Queensland and Victorian floods earlier this year.

Keeping the pressure on

Consumer Action is keeping the public pressure on the insurance industry and government  by holding a World Consumer Rights Day (15 March) event in the Bourke St Mall in central Melbourne.  We were voicing our concerns that for many consumers, an umbrella provides far greater protection against a flood  than their insurance contract.

We will also be participating in the Government’s national disaster insurance review by talking to the review panel and making submissions.

What can you do?

Click here to see our World Consumer Rights Day flyer and read our handy basic tips about insurance for consumers.

You can also talk to family, friends and your local Federal MP about the improvements you’d like to see to the way insurance works in Australia.

Got an insurance horror story?  Email us about it – we might be able to help and also might be able to tell your story in our submissions to the Government’s insurance review.

Need more information?

Legal information and advice

Financial Rights Legal Centre – Insurance Law Service  1300 663 464
Free legal advice about insurance, including consumer tip sheets.

Victoria Legal Aid 03 9269 0120 or 1800 677 402

Victoria Legal Aid have established Flood Legal Help for Victorians affected by the recent floods to obtain information and help about insurance and related issues.

Insurance complaints and disputes

Australian Financial Complaints Authority 1300 780 808

AFCA is an independent body that handles financial complaints for free – it is an alternative to court action, which can often be more time confusing, costly and difficult.

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