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ASIC regulates insurance and expects your insurer to treat you honestly and fairly. Find out about ASIC’s role in insurance and how to deal with insurance disputes.

How ASIC regulates insurance

ASIC’s role is to ensure that insurers and insurance brokers:

• offer insurance efficiently, honestly and fairly
• employ qualified staff who are trained to perform their role
• use advertising to inform consumers, rather than to mislead them
• give consumers the proper product disclosures and do so at the right time
• promptly submit the reportable situation/s to ASIC via the ASIC Regulatory Portal
• handle any complaints properly including by accepting the decisions of the Australian Financial Complaints Authority.

We license and regulate insurers and take action against insurers who fail to comply with the financial services laws. Including when insurers are being misleading or deceptive or are acting unconscionably.

ASIC expects insurers to:

• treat customers honestly and fairly
• always put customers’ interests before their commercial interests
• only offer customers products and services that deliver value for money
• assess insurance claims promptly and pay eligible claims
• compensate customers if they conduct themselves poorly and customers incur losses as a result.

We generally do not act for individuals and only take action where it will result in a greater market impact and benefit the general public more broadly. For more information see ASIC’s approach to enforcement Information Sheet 151.

Insurance Product Disclosure Statements (PDS)

It’s a legal requirement for insurers to provide a product disclosure statement for every financial services product they offer.

ASIC sets the regulatory standards for PDSs, to ensure that they are clear, accurate and comprehensive. A PDS provides important information - on exclusions, caps, limits and other conditions – that consumers need when comparing and choosing the best insurance product.

While ASIC doesn’t act on behalf of individuals, we can and do take action against providers that fail to provide PDSs or produce PDSs or other public statements about their products that are misleading. 

Visit ASIC’s Moneysmart website for tips for buying different types of insurance.

Resolving problems with insurance companies

There are three steps you can take to resolve issues with your insurance company:

1. Contact the insurer - Explain the issue to them by phone, in person, or in writing.

2. Make a formal complaint - If you are not happy with their response or if the problem can't be resolved, ask for their complaints handling procedure and put your complaint in writing.  Use Moneysmart’s tips to help you make a complaint.

3. Complain to AFCA - If you don't receive a response in a reasonable time or you're unhappy with the response, you can make a complaint to the Australian Financial Complaints Authority.

We also have specific guidance on how to deal with disputes about life insurance.

Help for Indigenous consumers

For help with making your complaint, you can contact ASIC's Indigenous Help Line on 1300 365 957.

Insurance codes of conduct

To progress your complaint you could refer to the insurance codes of conduct. A code of conduct (or a code of practice) is a set of enforceable rules setting out an industry’s commitments to deliver a certain standard of practice. ASIC does not approve or enforce these particular codes.

Codes of conduct are intended to raise industry standards and complement legislative requirements and encourage consumer confidence.

Here are the Insurance Codes of Conduct:

If you believe that an insurer has breached one of these codes, you can report your concerns to the Australian Financial Complaints Authority.

• Add-on insurance
• Consumer credit insurance

Car insurance

Avoid surprises when you claim on your car insurance

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You can claim on your car insurance when you've suffered any loss or damage that your policy covers.

When you have a car accident, contact your insurer as soon as possible. Some policies have time limits for claiming. Also ask them if you're entitled to any emergency benefits, for example, free car hire or accommodation.

1. Gather information about the accident

To make a claim, you have to meet the terms and conditions of your policy.

If your accident involved another car, your insurer may ask for details of the other driver, including:

• contact details (name, address, phone number)
• drivers licence and car registration
• insurance company
• car make, colour and model

Your insurer may also ask for:

• the location of the accident
• a description of what happened and any damage to cars or property (plus photos)
• a police report number (if the police attended or you reported your car stolen or damaged)
• details of the tow truck company (if one attended)
• contact details of any witnesses

2. Check what you can claim for

Check your policy to find out what you can claim for. For example, if you have third party insurance, you can only claim for damage to other cars.

Also check if there are any exclusions to your cover. You may not be covered if the person driving your car was under the influence of alcohol or drugs, or if your car was unregistered.

3. Check if you have to pay an excess

Generally, you have to pay an excess when you make a claim whether you're at fault or not. Some policies will waive the excess in limited circumstances.

Check your policy’s Product Disclosure Statement (PDS) for the excess amount and conditions where it might be waived.

If you’re struggling to pay your car insurance premiums or excess, contact your insurer straight away. Explain your situation and tell them you would like to apply for financial hardship.

For example, they may provide assistance to meet your excess if you have an accident and you're at fault and need to make a claim.

4. Make a claim

There are different rules and processes for claiming. Check the claims process on your insurer’s website.

If you do decide to claim, you'll need to fill out a claim form. You may be able to do this with your insurer over the phone or online.

Ask your insurer if you can start a claim to find out how much the repairs will cost. Then you can decide if it's worth going ahead. For example, if the damage is minor, the repairs may cost less than your excess.

If the other party has admitted it was their fault, their insurer may pay for your costs.

The General Insurance Code of Practice sets out what insurers should do to handle claims. If they do not meet these standards you can complain to the insurer.

5. After you make a claim

After you've made your claim, the insurer must contact you within 10 business days. They may accept or reject your claim, or ask for more information.

If they reject your claim, they must do this in writing.

Your insurer may contact any other drivers, their insurers, and any witnesses who saw the accident.

They may also investigate to confirm the details of what happened and who was at fault.

If you're not happy with how your insurer has handled your claim, make a complaint to their Internal Dispute Resolution team. If you are still not happy, contact the Australian Financial Complaints Authority (AFCA).

Alisha was not at fault, but still has to pay her excess

Alisha's car was hit by a person driving a stolen car, who drove off after the accident.

Alisha contacts her insurer to make a claim. They tell her she will have to pay the excess, even though the damage wasn't her fault.

Alisha checks her policy. She finds a condition stating she has pay the excess if the 'at fault' party can't be found.

Contents insurance covers your household items and personal belongings if they're damaged, lost or stolen.

This can include your furniture, clothes, computer, fridge, television, tools and jewellery.

If you own your home, you can bundle your contents insurance with your home insurance. This is usually cheaper than having separate policies.

Getting the right contents insurance

When choosing contents insurance, think about the value of your belongings. Ask yourself what you could afford to replace or lose if something went wrong.

Cover the cost of replacing your belongings

Most contents insurance offers the replacement value of your belongings, sometimes called 'new for old' cover. It covers the full cost of replacing your belongings with new ones, which often cost more. Replacement value gives you the best cover, but it's more expensive.

Some policies offer the value of your lost or damaged belongings. This covers what they are worth at the time they're insured. For example, your fridge might be currently valued at $500, so you get $500 from the insurer. It may cost more to buy a new one of similar quality. This value is likely to depreciate (go down) each year.

When you claim, insurers may repair or replace the damaged items, or pay you the amount it would cost to repair or replace them.

Calculate the value of your belongings

Work out what your belongings are worth to see how much cover you need. It will also help you identify what items are worth insuring.

Start by listing all your belongings and how much each item would cost to replace (at today’s prices). Include as many details as possible. For example, serial numbers, receipts, warranties, photos, condition and the date of purchase.

To help, Good Shepherd Microfinance has a list of common household items and their average value. See the Insure it, it's worth it toolkit. Or use the contents insurance calculator on the Insurance Council of Australia's website.

Consider accidental damage cover

Most contents insurance doesn't include cover for accidental damage. It may be worth adding this if you want cover for mishaps, such as staining your couch or smashing a vase.

Also check what isn't covered, for example, damage to clothing or computers.

Check the exclusions

Contents insurance covers loss and damage caused by defined or insured events. These can include fire, storm, theft and vandalism.

It's worth checking what isn't included. For example, damage caused by floods, intentional or criminal damage, or theft if you leave windows or doors unlocked.

Also check what items aren't covered and decide if you want to add something. For example, portable items like your handbag, glasses, camera, bicycle, mobile phone, tablet or laptop. Or valuable items like jewellery and special collections, such as artwork, stamps, rare books or memorabilia.

Consider renters insurance

If you rent your home, renters insurance could be a good option. This type of contents insurance is usually cheaper. It may cover accidental damage to the house, and legal costs if someone injures themselves on the property. However, it has more exclusions and limits than regular contents insurance.

Check limits for certain items

Most policies have maximum amounts on how much you claim for certain items. For example, suppose $1000 is the limit for electrical appliances. If fire destroys your $2000 television, you’ll end up having to pay the difference to replace it.

Adjust your excess

Most insurers allow you to adjust your excess. Weigh up the difference between having a high premium and low excess, versus the opposite. You may be able to save on your premium by increasing your excess.

Take advantage of discounts and benefits

You may pay a lower premium if you bundle your contents insurance with your home insurance, pay annually or apply online.

You could get a discount if you have deadlocks, fire extinguishers, smoke alarms or a security system.

Some insurers offer extra benefits. These could include replacing locks and keys after a break-in, or cover for your belongings when you move house.

If you're on a low income, Good Shepherd Microfinance offers cheaper and simpler contents insurance, with flexible payment options. See Good Insurance.

Comparing contents insurance

Get quotes from more than one insurer to find the best value and a policy that suits your needs. Compare the Key Fact Sheets of different policies. If you want more detail, read the product disclosure statement (PDS).

Comparison websites can be useful, but they are businesses and may make money through promoted links. They may not cover all your options. See what to keep in mind when using comparison websites.

Compare these features:

 Renewing your contents insurance

When it's time to renew your policy, update your policy to reflect any changes. For example, add cover for special items or add new items.

Get quotes from a few other insurers to check you're getting the best deal. You may end up paying more if you stay with your current insurer.

Tiana and Simon are burgled

Tiana and Simon moved into a small apartment near the city. They decided to get contents insurance even though their building had a security system.

Two months later, their apartment was burgled. The thief stole Tiana's laptop and some expensive camera equipment.

Although they were very upset, Tiana and Simon were glad they took the time to get the right cover. Tiana has a new laptop, and they have insurance money to replace the camera equipment.