The government has officially started a process to define standardised terms for natural hazards in insurance policies. The Assistant Treasurer, Stephen Jones (pictured above), released a consultation paper this morning.
A standard flood definition was legislated in 2012. The government is now looking to find standard definitions for fire, storm, stormwater and rainwater runoff.
“We welcome this consultation process announced by Assistant Treasurer Stephen Jones today and look forward to working with The Treasury on the standardised terms being considered,” said Insurance Council of Australia CEO Andrew Hall.
Hall said more needs to be done to improve consumer understanding of policies and standardised definitions “may assist with this.”
“An independent review of the industry’s Code of Practice is currently underway and the ICA has commenced discussions with insurers about the possible adoption of standardised clauses for maintenance and wear and tear exclusions in policies, which may also assist with providing greater clarity for customers,” he said.
According to Treasury’s website, “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.”
Submissions for the consultation are due by April 04.
