The consumer watchdog has recommended federal government implement a compulsory national home insurance comparison service to help those struggling with high premiums in northern Australia.
The Australian Competition and Consumer Commission, which has been looking into the insurance market at the natural disaster-prone Top End since July 2017, made the formal recommendation for a website on Tuesday as it tries to address concerns over availability, affordability and transparency.
Following feedback from stakeholders, the ACCC found consumers had little idea how insurers assess risk or set rising premiums, with the complexity of the market making product comparisons extremely difficult.
“Communities across northern Australia have told us of their frustration and, at times, distress, in trying to find suitable and affordable insurance in this market,” ACCC deputy chair Delia Rickard said.
Websites that currently offer comparisons between insurance companies are not comprehensive – with many products and the country’s four biggest providers – missing.
The ACCC is also pushing for greater consumer power during claims settlements amid 13 formalised recommendations aimed at giving northern Australians better price transparency and more choice.
Legislative changes to the Insurance Contracts Act has also been proposed, allowing customers the right to choose how their home insurance claim is settled – either through a repair or rebuild – or with a cash payment.
“Consumers may prefer a cash settlement so they can have more control over which builders are used, as well as the scope and timing of the repairs or rebuilding work,” Ms Rickard said.
“In other cases, insurers may finalise a claim with a cash settlement when a consumer would prefer that the insurer manage the repair work.”
The inquiry is looking at the barriers preventing some insurance companies from entering northern Australia, after finding most insurers who did operate in the region over the past decade ran at a loss.
The finalised recommendations released on Tuesday follows the 13 draft proposals outlined in the first interim report in December 2018.
A second interim report is due to be handed down by November this year, with a final report 12 months later.