ACCC seeks to ease insurance burdens
A COMPARISON website for home insurance and greater power for consumers in claims settlements are among the measures proposed by the nation’s competition regulator to combat skyrocketing premiums in Northern Australia.
The Australian Competition and Consumer Commission has released its latest Northern Australia Insurance Inquiry report, finalising 13 recommendations from an interim report aimed at boosting price transparency and consumer choice.
“Communities across Northern Australia have told us of their frustration and, at times, distress, in trying to find suitable and affordable insurance in this market,” said ACCC deputy chair Delia Rickard.
“Consumers have been given little visibility into how insurers assess risks, set premiums, or why premiums in this region continue to rise. The opacity and complexity of these markets makes comparing products extremely difficult.
“Our recommendations aim to give consumers the clear, simple information they need to make these crucial decisions about their insurance cover.”
The ACCC has recommended the Federal Government consider a national home insurance comparison website to support competition between insurers, who would be required to participate in the website.
“While there are commercial comparison sites available, these do not compare products from all providers, and Australia’s four biggest insurers do not participate in these websites at all,” Ms Rickard said.
Also the regulator says consumers should be given the right to choose how their home insurance claim is settled, either through a repair or rebuild managed by the insurer or through a cash payment, after receiving warnings about the risks of taking a cash settlement.
It says this right should be legislated through changes to the Insurance Contracts Act.
The ACCC has recommended consumers be provided with clearer information about insurance products such as the premium costs or savings from optional inclusions or exclusions. Other recommendations include extending the minimum time for consumers to be provided with a renewal notice before a policy expires from 14 to 28 days.
The ACCC has also proposed that strata managers be paid only by their body corporates, and not accept payment from insurance brokers or insurance companies when they arrange strata insurance.
A full list of recommendations can be found in the report at www.accc.gov.au/ f o c u s - a r e a s / i n q u i r i e s / northern-australia-insuranceinquiry.