The Australian Competition and Consumer Commission has today issued a decision proposing to grant conditional authorisation* to the Insurance Council of Australia for a proposed common definition of 'inland flood'.
"Flood insurance has become a critical issue for Australian consumers in recent years, with a number of reports identifying unsatisfactory levels of consumer confusion about insurance cover for flood," ACCC Chairman, Mr Graeme Samuel, said.
The Insurance Council has put forward a proposal which would, if authorised by the ACCC, see insurance companies voluntarily adopting a common definition of inland flood.
"The ACCC considers that the proposed standard definition has the potential to result in benefits to consumers, predominantly by helping consumers to better understand their policies and for what damage they are covered."
The ACCC has proposed a number of conditions which are aimed at improving the transparency of the Insurance Council's proposal. These conditions will also strengthen the consumer education campaign proposed by the Insurance Council.
"An effective, comprehensive consumer education campaign is an essential element of any proposal aimed at helping consumers to better understand the complex issues surrounding flood insurance.
"While a common definition will go some way towards addressing consumer confusion, the proposal does not seek to address consumer concerns about the availability, adequacy and extent of flood cover. It remains important that consumers check their policies to see if they are covered for flood. Consumers should talk to their insurer if they have any questions."
The ACCC's draft determination will be available from the ACCC website.
The ACCC is seeking submission from interested parties in relation to its draft determination. Submissions can be made to: The General Manager, Adjudication Branch, Australian Competition and Consumer Commission, GPO Box 3131, Canberra, ACT, 2601. Submissions can also be lodged by fax on (02) 6243 1121 or by email to: adjudication@accc.gov.au.