ICA backs standardised definitions for natural hazards in insurance policies

Standardised definitions entail all insurers use the same definition for a specific event in their policies.

The Insurance Council of Australia (ICA) shows support for the treasury’s consultation on standardised definitions of natural hazards in insurance policies and the standard cover regime.

The announcement was made by Assistant Treasurer and Minister for Financial Services Stephen Jones, which highlighted the consideration of standardised definitions for fire, storm, stormwater and rainwater runoff, building upon the legislated standard definition for flood in 2012.

“We acknowledge there is more to be done to improve consumer understanding of policies, and standardised definitions for fire, storm and stormwater and rainwater runoff may assist with this,” ICA CEO Andrew Hall said in a statement.

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In addition to the consultation on natural hazard definitions, the ICA has initiated discussions with insurers.

“An independent review of the industry’s Code of Practice is currently underway and the ICA has commenced discussions with insurers about the possible adoption of standardised clauses for maintenance and wear and tear exclusions in policies, which may also assist with providing greater clarity for customers.” added Hall.