Standard definitions and standard cover for insurance

This consultation process has now been completed.
Consultation Type
Consultation Paper

Key Documents

In the 2022–23 October Budget, the Australian Government announced its intention to improve consumer understanding of insurance products as part of a package of reforms designed to:

  • reduce the cost of insurance in communities at risk of natural disasters
  • enhance mitigation measures
  • promote better outcomes for consumers.

Treasury has been tasked with exploring possible natural hazards terms to standardise for insurance contracts and to review the standard cover regime.

Standard definitions in insurance refers to the process of mandating that all insurers use the same definition for a particular event in their insurance contracts. Currently the only natural hazard definition that is standardised is ‘flood’.

The standard cover regime in the Insurance Contracts Act 1984 requires insurers to offer a baseline level of cover unless:

  • before the contract was entered into, the insurer ‘clearly informed’ the insured in writing or
  • the insured knew, or a reasonable person in the circumstances could be expected to have known, that the insurance contract provided less than the standard cover, or no cover.

This consultation paper seeks feedback on potential natural hazard terms for standardisation, as well as possible reform to the standard cover regime. Interested stakeholders are invited to provide a response by 4 April 2024.


No submissions are currently available.