The Insurance Council of New Zealand (ICNZ) has rejected Consumer NZ assertions that general insurance customers get a raw deal.

A Consumer NZ member survey found only 18% of people fully understand their policies, and only 13% trust their insurers to give good advice.

It found high numbers of complaints and low trust levels. The top complaint is claims being unreasonably declined.

But ICNZ says a survey by the Ministry of Business, Innovation and Employment last year found only 10% of insurance customers have experienced an issue with their insurer.

It says insurance is outside the top seven most-complained-about industries.

“These aren’t bad figures, especially considering insurance consumers were less likely than average to have had an issue with their purchase,” ICNZ CEO Tim Grafton said. “However, we accept a lot more needs to be done to better communicate the value of insurance to our customers. A lot of work is under way right across the sector to put customers’ interests first.”

The fact most people seldom claim does not mean the industry is unfair, Mr Grafton says.

He says more than 90% of claims are paid and the vast majority that are not have been withdrawn because they are below excess or outside the policy’s scope.

“Consumer NZ also criticises us for consumers not being able to ‘fully understand their policies’, but then advocates for a one-page summary.

“It’s not possible to communicate the content of an entire policy on one page. If it were, insurers would already do it. We can do better to communicate and simplify – we accept that – but a one-page summary hardly qualifies as providing a full understanding of what is in a policy.”