Insurers urged to be more transparent on home insurance premiums

Insurers urged to be more transparent on home insurance premiums | Insurance Business

Insurers urged to be more transparent on home insurance premiums
Insurance companies have been urged to be more transparent on home insurance premiums, as research found that insurers can charge up to $1,700 more than each other for home and contents policies for identical properties.

The industry countered that the variations in premiums were due to different types of coverage and reflects healthy competition.

According to research by the Emergency Services Levy Insurance Monitor, which surveyed premiums across 11 suburbs, “basic home and content policies” between insurers vary at an average of $1,100, Sydney Morning Herald reported.

In Medlow Bath, GIO made the highest quote at $2,794 - two-and-a-half times more than the lowest quote of $1,106 from Coles.

In East Gosford and Bradbury, near Campbelltown, the highest quotes were 2.4 times more than the lowest, a difference of $1,461 and $1,700 respectively, the report said.

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ESL monitor Professor Allan Fels said that while one can expect price differences across different suburbs with different characteristics, it is very concerning that there are such big differences in prices quoted for the same property, SMH reported.

“It suggests that competition is not fully effective in this industry,” he said.

Fels said insurers are turning deaf ears to calls to list the previous year’s policy cost in their renewal insurance notices, a measure which will be implemented as a mandatory requirement by UK general insurers from April.

Insurers had also refused to set up home insurance price comparison websites.

Rob Whelan, chief executive of Insurance Council of Australia, tagged the monitor’s comparisons as “misleading,” arguing that “each insurer’s policy is different.”

“They offer varying inclusions and exclusions, with different limits,” he said. “Further, several insurers quoted offer total replacement, which usually has a higher premium, while most insure for agreed value.”

The ICA boss said insurers are exploring the feasibility of listing last year’s premium on renewal contracts, and a trial had been organised by the council.

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