Laws ensure fairer insurance

IPSWICH residents and other Australians "won't have to fight insurance claims with one hand tied behind their backs" now that the Federal Government has legislated to protect consumers from unfair terms in insurance contracts.

After the 2011 floods many Ipswich residents found that expected insurance payouts were denied by the fine print.

But that situation is now set to change.

Federal Member for Blair Shayne Neumann said that for the first time protections against unfair contract terms enshrined in Australia's consumer protection legislation will be extended to general insurance contracts, which had previously been excluded.

"Australians should not have to fight insurance claims with one hand tied behind their back because of unfair contract terms," Mr Neumann said.

These new protections will allow consumers, or the Australian Securities and Investments Commission as the regulator, to challenge a term in the courts.

"People have long had concerns that some terms in insurance contracts are simply unfair and are used to dismiss otherwise valid claims.

"The worst nightmare for many people facing a traumatic moment in their lives is finding out they will not have their insurance claims paid because the fine print in a contract unfairly favours the insurance companies.

"People in the community of Ipswich and the Somerset region deserve to know that insurance companies won't simply take their premiums and hide behind unfair terms to leave them high and dry when it comes time to pay out a claim.

"That is because the exemption that the insurance industry had from consumer protection legislation will be gone."

Mr Neumann said his office was "overwhelmed by the amount of people in Ipswich and the Somerset region who had suffered as a result of the actions of some insurance companies".

He was "concerned about the claims handling processes" and was a member of the House of Representatives Standing Committee on Social Policy and Legal Affairs after lobbying for an inquiry into the responsiveness of the insurance industry during natural disasters.

"These reforms are just one of the outcomes of the inquiry, which also brought about a standard definition of flood and ensured all policies offered cover for floods," he said.

While these changes do not help those who lost so much, we can be proud that the experiences of people in Ipswich and the Somerset region continue to have an impact on reforming the insurance industry.