Financial Rights Legal Centre submitted a response to the Productivity Commission’s Draft Report on Natural Disaster Funding Arrangements. The submission focused on encouraging better transparency of insurance premiums and creating a mechanism of review for consumer’s in relation to insurance premium pricing. Insurers should not be able to hide behind vague reasons and unsubstantiated assertions about how premiums are priced. They should have to substantiate premium pricing across all forms of insurance. In the home and contents space it is essential.
In our view, the failure of industry to have any mechanism of review of the accuracy of premium calculations is of significant detriment to consumers. This failure also provides no guarantee that any household mitigation strategies or idiosyncratic household conditions are taken into account when determining premiums. Consequently, premium prices cannot be said to be “accurate” signaling of risk as there is no contestability or transparency in their calculation.
