VACC calls on Bill Shorten to Review Comprehensive Car Insurance

SYDNEY – Nov 18, 2011: VACC has repeated its call for a review of comprehensive car insurance. VACC has followed the National Disaster Insurance Review closely and has written to Assistant Treasurer, Bill Shorten, to propose that many of the Review’s principles be applied to comprehensive car insurance policies.

Mr Shorten has released his flood insurance proposals. Home owners will be offered standard home insurance and the ability to opt-out of flood insurance if they want to. VACC has proposed that car insurance policies provide the same thing, namely, ‘insurance by exception’, whereby motorists are provided with standard comprehensive car insurance and have the ability to opt-out of certain aspects of the cover, if they want to.

“We commend Mr Shorten for his review of flood insurance and for introducing a standard definition of flooding. We call on him to now turn his attention to comprehensive car insurance. We believe the current system denies a motorist the scope to make important decisions. Insurance companies are supposed to provide a service to consumers, but essentially they control what the consumer gets,” VACC Executive Director, David Purchase, said.

“Important aspects of comprehensive car insurance cover, like the choice of who repairs a vehicle following a crash, are lost in small print and lengthy product disclosure statements. The introduction of standard comprehensive car insurance, with opt-outs, would put motorists back in control.

“For example, many motorists assume their comprehensive car insurance allows them the choice of who will repair their car following a crash. However, on closer inspection of their policy documentation, they find the insurer makes the decisions. Motorists tell us that choice of repairer is important to them.

“Home insurance companies seem to have backed Mr Shorten’s proposed changes to make home insurance more transparent. If they can be flexible on this issue, then they can be flexible on comprehensive car insurance policies,” Mr Purchase said.