ICA non-insurance figures 'misleading'
The insurance industry has been accused of fudging research figures to highlight non-insurance figures in the wake of the Victorian bushfires.
Leading consumer lawyer Denis Nelthorpe and Financial Ombudsman Service board member Fiona Guthrie, say the Insurance Council claim that 24.5% of Victorians do not have home and contents insurance is misleading.
“The true figures, based on a proper reading of their own research, are that 4.1% of Australian households do not have building insurance and around 28% of households do not have contents insurance,” they said in a letter published in The Age newspaper.
“What the Insurance Council has done is combine two separate pieces of data.”
Mr Nelthorpe and Ms Guthrie are the latest figures to weight into a media debate that has raged for the past week on radio and in newspapers on the merits of using some of the $210 million raised by the community to rebuild the homes of uninsured bushfire victims.
While a decision on how to disburse the funds is expected to be made this week, Prime Minister Kevin Rudd says the response should be “appropriately compassionate”.
“I would have run into so many people who aren’t properly insured, who aren’t insured at all,” he said in a radio interview on Friday.
Mr Rudd says the insurance-related issues could be examined by the royal commission investigating the bushfires to decide “what should be the best form of insurance for Australia for the future”.
But Mr Nelthorpe and Ms Guthrie say the royal commission “needs to be given accurate data and to look behind the not-so-hidden agenda of the industry lobby group” which wants fire services levies on premiums abolished.
“The Insurance Council has suggested that the removal of the fire levy would reduce premiums and make cover more affordable,” they said. “In fact, their own research actually suggested that the removal of the levy would assist only marginally and would not assist the low-income portion of the population at all.”
They say most of the bushfire victims who had no contents insurance “simply cannot afford the premiums”.
“The most effective way to increase levels of contents insurance would be for the insurance industry to offer lower-income earners affordable products and payment options more suited to their circumstances.”
In a statement received late Monday, ICA CEO Kerrie Kelly rejected the criticism, stating “selectively quoted figures” were used among “incorrect and deliberately misleading” comments.
ICA admits the 4.1% figure is a national average specific to building cover but separate statistics from the Victorian bushfires indicate 28% of destroyed homes were not insured.
ICA says it is working with charity The Smith Family to improve insurance take-up rates among low-income earners.
“The issue of people accessing insurance is not just one of price it is also one of education,” Ms Kelly said.
Leading consumer lawyer Denis Nelthorpe and Financial Ombudsman Service board member Fiona Guthrie, say the Insurance Council claim that 24.5% of Victorians do not have home and contents insurance is misleading.
“The true figures, based on a proper reading of their own research, are that 4.1% of Australian households do not have building insurance and around 28% of households do not have contents insurance,” they said in a letter published in The Age newspaper.
“What the Insurance Council has done is combine two separate pieces of data.”
Mr Nelthorpe and Ms Guthrie are the latest figures to weight into a media debate that has raged for the past week on radio and in newspapers on the merits of using some of the $210 million raised by the community to rebuild the homes of uninsured bushfire victims.
While a decision on how to disburse the funds is expected to be made this week, Prime Minister Kevin Rudd says the response should be “appropriately compassionate”.
“I would have run into so many people who aren’t properly insured, who aren’t insured at all,” he said in a radio interview on Friday.
Mr Rudd says the insurance-related issues could be examined by the royal commission investigating the bushfires to decide “what should be the best form of insurance for Australia for the future”.
But Mr Nelthorpe and Ms Guthrie say the royal commission “needs to be given accurate data and to look behind the not-so-hidden agenda of the industry lobby group” which wants fire services levies on premiums abolished.
“The Insurance Council has suggested that the removal of the fire levy would reduce premiums and make cover more affordable,” they said. “In fact, their own research actually suggested that the removal of the levy would assist only marginally and would not assist the low-income portion of the population at all.”
They say most of the bushfire victims who had no contents insurance “simply cannot afford the premiums”.
“The most effective way to increase levels of contents insurance would be for the insurance industry to offer lower-income earners affordable products and payment options more suited to their circumstances.”
In a statement received late Monday, ICA CEO Kerrie Kelly rejected the criticism, stating “selectively quoted figures” were used among “incorrect and deliberately misleading” comments.
ICA admits the 4.1% figure is a national average specific to building cover but separate statistics from the Victorian bushfires indicate 28% of destroyed homes were not insured.
ICA says it is working with charity The Smith Family to improve insurance take-up rates among low-income earners.
“The issue of people accessing insurance is not just one of price it is also one of education,” Ms Kelly said.