01.New report calls on the insurance industry to reveal risk data
Victoria’s Fire Services Levy Monitor, Professor Allan Fels, has released a report that calls on the insurance industry to reveal to consumers the risk information it relies on to set premiums.
An earlier CHOICE investigation into the same issue found that homeowners whose premiums had doubled or even tripled in recent years were not being informed about the related risks or how they had been determined.
Homeowners are still left in the dark, the report confirms.
“Informed consumers would bring about a more level playing field in insurance,” Professor Fels said. He told the ABC that insurance quotes can vary as much as 60% for the same property.
Insurance companies told us during our investigation that they refuse to share risk information for commercial in confidence reasons.
The report calls on insurance companies to:
- Explain premium price changes when policies are up for renewal.
- Provide more accessible information about what consumers are covered for and what they are not covered for.
- Explain how insurance companies assess an individual’s risks including bushfire, flood and burglary and explain whether those risks are low, medium, high, or very high.
- Clearly identify any government charges such stamp as duty, GST, or a fire services levy and detail the costs separately to the basic premium cost.
- Explain what additional charges might be incurred as a result of choosing to pay insurance in instalments.
Last month CHOICE partnered with the Climate Institute in the release of a report that also calls for better access to risk information for homeowners and homebuyers. Climate Institute CEO John Connor said an average home insurance premium “could rise by 92% over the life of a standard 30-year mortgage” as climate change continues to trigger extreme weather events.
The Levy Monitor research was conducted in the wake of complaints about questionable pricing tactics by insurance companies after the Victoria fire services levy was changed from an insurance-based to a property-based system in July 2013.