Natural Disaster Funding Arrangements: Submission to the Productivity Commission

The Financial Rights Legal Centre has provided a submission to the Productivity Commission on its Issues Paper, Natural Disaster Funding Arrangements.

The key points and recommendations made in this submission are:

• Financial Rights submits that our Insurance Law Service is well-placed to act as a national insurance advice hotline and referral service in times of natural disaster.
• Consumers must be able to assess and understand their insurance coverage. The disclosure process needs to be markedly improved with research and testing to ensure consumers understand their cover and exclusions
• Independent and government funded comparison websites that compare both price and coverage are essential
• Publicly available and extensive independent information on risk (through a website) is necessary
• The NDIR review recommendations should be adopted in full, including the compulsory cover for all disaster events, premium discounting to avoid cross-subsidisation and government top ups in the event the reinsurance pool is insufficient.
• Data needs to be obtained from the insurance industry on the extent of non -insurance with the data analysed and compared to risk of natural disaster
• Consumers need disclosure about changes in pricing including compulsory disclosure of any reasons that would be relevant to a request pursuant to s. 75(1)(d) of the Insurance Contracts Act.