ASIC reports that following an industry wide review six insures have agreed to better inform consumers about their motor vehicle insurance policies automatic renewal process.
The review was prompted by consumers and consumer group complaints as well as ASIC concerns about consumers who were unaware their insurer automatically renewed their annual insurance policy by directly debiting their bank account or credit card, unless they opted out.
As a consequence of the review, six insurers who routinely engage in the automatic renewal practices have agreed to better inform consumers when they first purchase motor vehicle insurance. ASIC Deputy Chair Peter Kell said the disclosure improvements would reduce the risk of consumers being caught by surprise when their insurance is due for renewal, while adding that the practices may be convenient for some, it is more important that consumers make an informed choice.
ASIC’s response to this review complements ASIC’s focus on improving the selling practices of financial products.
ASIC will continue to monitor this issue and advocate for improvements to similar point of sale disclosures in the future.
Click here to read the ASIC media release.
This blog was co-authored by DLA Piper partner Sophie Devitt and DLA Piper graduate solicitor Arndt Herrmann.