Effie Zahos of Nine News has reported that the Australian Securities and Investments Commission (ASIC) will launch a probe into motor insurance renewal notices.
According to Nine News the probe will cover two-thirds of the car insurance market and will scrutinise “fake discounts and excessive increases” in what ASIC believes is a wide spread deception of motor insurance policy holders.
“People are unhappy with the premiums they’ve been quoted and the increases they’re seeing. And they’re also really unhappy with how those increases are being explained, and that’s why we’ve decided to look into this issue,” ASIC commissioner, Alan Kirkland, said.
Nine News highlighted a case where a policy holder negotiated a cheaper rate on their policy one year and that cheaper rate was not shown on the renewal notice the following year. The notice instead showed the original non-discounted rate from the previous year and then a small preminum increase on that amount.
“That’s misleading, and could be in breach of the law,” Kirkland said.
“They’re understating the premium increase, and that means you’re less likely to be prompted to shop around.”
ASIC is calling for renewal notices to be made simpler and clearer.