Consumer group Choice has asked the royal commission into financial services to examine claims denials and to compel insurers to disclose more information around premiums.

It says in a submission that a survey resulted in people relating “experiences of delays spanning years of unfair denials of claims”.

“We want perverse incentives to deny claims to be exposed and removed.”

The submission says customers are concerned premium levels disadvantage those who remain loyal compared with those taking out a new policy, and there is a lack of information to explain price increases.

“Transparency will allow people to understand why their premiums are rising, take control of the risks and find better offers when insuring their homes and cars,” Choice says.

The Consumer Action Law Centre, in a second part to its earlier submission, has called for improved redress measures.

It says the monetary limit and compensation cap for the new Australian Financial Complaints Authority should be raised to $2 million, considering house price gains and the increasing number of people living in multi-dwelling arrangements.

“Sub-limits must also be raised significantly, particularly the limit on third party motor vehicle insurance and consequential loss,” it says.

The submission also reiterates concerns over the sale of add-on insurance through car dealerships. “A market that is heavily incentive-driven and does not have adequate controls or monitoring is a recipe for widespread misconduct and exploitation.”