Liability Insurance Australia :: News

Share this news item!

Consumer Advocates Criticise Insurers Over 'Poverty Premiums' and 'Loyalty Taxes'

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Consumer advocacy groups have voiced strong opposition to the insurance industry's decision to reject recommendations designed to eliminate practices that disadvantage consumers, including charging higher rates for monthly bill payments and increasing renewal premiums for loyal customers.

The Financial Rights Legal Centre has cited ongoing reports from consumers being adversely affected by these pricing practices, which they refer to as a "poverty premium" and a "loyalty tax."

The Insurance Council of Australia (ICA) recently published an action plan in response to 150 recommendations from the parliamentary floods inquiry and a comprehensive review of the industry code of practice. Despite the consensus among both reviews that insurers should not charge more for monthly payments than they do for annual ones, and renewal premiums should not surpass those offered to new customers, the ICA asserts that enforcing pricing policies is not within the code's remit due to competition law restrictions.

Continuous concerns have been raised about the code's enforceability and the numerous recommendations the ICA did not fully endorse. Financial Rights Legal Centre's Drew MacRae stated that around 38 recommendations are still under consideration, or have been delegated to individual companies to decide upon.

Financial Counselling Australia has expressed significant concern that the ICA's action plan does not actively address inequitable pricing practices. According to their disaster recovery co-ordinator, Louise Hayes, it is essential for insurers to address these unfair practices and incorporate them into the industry code to ensure accountability and equity.

While the ICA's action plan includes some positive initiatives, such as a framework for assisting vulnerable customers, it also drew criticism for lacking a firm commitment to enforceability. The recommendations from the inquiry suggested these policies should be embedded contractually within product disclosure statements to strengthen consumer protection.

Stephanie Tonkin, CEO of Consumer Action Law Centre, highlights the importance of rebuilding consumer trust, especially following the response to the 2022 floods. She stresses that the industry's focus should shift more towards customer welfare rather than profitability, with enforceable actions driving this change.

ICA CEO Andrew Hall noted that the action plan aims to guide industry changes over the coming years with a central focus on enhancing the customer experience. He acknowledged the necessity of collaborating with consumer advocates, regulators, and the government to tackle the underlying issues cited in the reviews.

Published:Wednesday, 26th Mar 2025
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Rate this article

0 Comments

No comments yet. Be the first to share your thoughts.

Insurance News

Insurance Code Rewrite Could Lift Standards for Tradies

21 Jun 2026: Paige Estritori

Australian tradies could soon see an important shift in how general insurers are expected to communicate, manage claims and resolve disputes, with the industry’s General Insurance Code of Practice moving closer to a major rewrite. - read more

ASIC Warning Highlights Ongoing Delays in Super Death Benefit Claims

21 Jun 2026: Paige Estritori

ASIC’s latest warning to superannuation trustees is a timely reminder that life insurance is only as valuable as the claims process behind it. The regulator’s June 2026 progress review found that while many trustees have improved how they manage death benefit claims, some are still moving too slowly on basic service standards for grieving families. - read more

Rural Insurance Costs Face Fresh Scrutiny in Queensland

21 Jun 2026: Paige Estritori

Insurance affordability in south-west Queensland has moved from local frustration to a national competition issue, after Maranoa MP David Littleproud lodged a formal complaint with the Australian Competition and Consumer Commission over sharp premium increases across the region. - read more

Why Policy Exclusions Matter Before a Claim

21 Jun 2026: Paige Estritori

A recent Victorian Supreme Court decision is a timely reminder that having property or business interruption cover does not automatically mean every costly disruption will be insured. The case involved a glass reprocessing business whose site was taken over by Victoria’s environmental regulator in early 2020 after concerns about fire hazards, contamination and risks to public health and the environment. - read more

Victoria’s Strata Commission Debate Enters a New Phase

20 Jun 2026: Paige Estritori

Victoria’s owners corporation sector has moved into a new stage of reform after the state government released its response to an expert review of the Owners Corporations Act 2006. While the review recommended stronger controls over payments and benefits linked to owners corporation managers, including commission-style arrangements, the government has stopped short of an immediate ban and will undertake further analysis before deciding how far the changes should go. - read more

Click for more Insurance News

Business Insurance Articles

The Importance of Public Liability Insurance in the Australian Labour Hire Industry

The Australian labour hire industry has seen a significant rise in recent years, and with this growth, comes new and unique risks that companies in this industry must be prepared to navigate. One such risk is the potential for accidents or damages to occur in the workplace, which is where public liability insurance comes in. This article will explore the definition of public liability insurance and why it is so important for labour hire companies in Australia. - read more

Understanding the Key Factors Influencing Your Liability Insurance Premiums

Liability insurance is a form of coverage that protects businesses against claims resulting from injuries and damage to people or property. It provides crucial peace of mind, ensuring that your business is shielded from potentially devastating financial losses due to lawsuits or claims against it. - read more

How Public Liability Insurance Can Save Your Business During a Crisis

Public liability insurance is designed to protect your business from financial loss if you are found liable for causing injury or property damage to a third party. This type of insurance covers legal costs and any compensation claims that might arise from accidents or incidents involving your business operations. - read more

Understanding Liability Insurance: A Must-Read for Australian Business Owners

As a business owner in Australia, navigating the complexities of insurance is crucial to safeguard your enterprise against unforeseen events. Liability insurance emerges as a cornerstone of a sound risk management plan, protecting you financially when held responsible for accidents, injuries or negligence. Its importance cannot be understated, as it serves not only to defend your business assets but also to ensure peace of mind in a climate of continually evolving liabilities. - read more

Understanding the Role of Public Liability Insurance in Business Disaster Planning

For Australian business owners, planning for unforeseen disasters is not just prudent; it's an essential aspect of sustaining operations amidst challenges. Recognizing the importance of comprehensive strategies, including robust insurance cover, can make all the difference in business longevity and legal protection. As we navigate the complexities of running a business, it's imperative to have a safeguard against mishaps that could otherwise jeopardize our hard-earned success. - read more

Start Here !

Knowledgebase

Reinsurance:
Insurance that an insurance company purchases from another insurance company to mitigate risk.

This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised Financial Services Representative of Unique Group Broker Services Pty Ltd, Australian Financial Services License 509434. Visit the ASIC website for additional licensing information.

IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.

Consumer Advocates Criticise Insurers Over 'Poverty Premiums' and 'Loyalty Taxes'

Consumer Advocates Criticise Insurers Over 'Poverty Premiums' and 'Loyalty Taxes'

Share this news item:

Start here!