ASIC puts home insurance industry under the microscope for potential advertising misconduct
The Australian Securities and Investments Commission has been investigating the experiences of customers when purchasing home insurance and found that some instances of advertisements for home insurance products indicated “potential misconduct”.
The findings have been revealed in two reports released today, with ASIC stating it’s currently speaking with some insurers about the issue and “considering undertaking further regulatory action with other relevant insurers.”
ASIC deputy chairman Peter Kell said they will “continue to monitor providers to ensure they are complying with their obligations to provide consumers with accurate information.”
Kell said that adequate home and contents insurance is important, especially with the recent natural disasters in Australia. “Purchasing home insurance should not be considered an afterthought, as it is vital for consumers to fully understand the type of product they are purchasing.”
“ASIC's reports make it clear that the home insurance industry can implement measures that will meaningfully improve consumers' understanding of their policy, and help ensure consumers buy a product that meets their needs.”
The reports showed that while Aussie customers are asking questions and seeking advice, the majority of insurers have adopted a 'no advice' or 'factual information' business model. “Consumers need help from insurers to make better decisions, beyond simply providing PDSs to consumers,” ASIC advised.