In 2010-11 there was severe flooding in Queensland, New South Wales and Victoria. The large number of people affected by the floods who held inadequate insurance cover highlighted consumer confusion over the extent to which policies provide cover for flood and what cover for flood means.
On 15 April 2012 the Insurance Contracts Amendment Act 2012 which provides a legislative framework to allow regulations to require insurers to provide consumers with a one page key facts sheet for home building and home contents insurance policies received Royal Assent.
The Hon Bill Shorten MP, the Minister for Financial Services and Superannuation, has now released an exposure draft of the Insurance Contracts Amendment Regulation 2012 (No.2) which will amend the Insurance Contracts Regulations 1985 to require an insurer to provide a consumer with a one page key facts sheet for home building and home contents insurance contracts. The key facts sheet includes particular content presented in a specified format and structure to aid the comparability of information.
The key facts sheet will reduce consumer confusion regarding what is and is not included in insurance contracts and provide consumers with a mechanism to easily compare the key aspects of insurance contracts.