The Australian Securities and Investments Commission (ASIC) wants further improvements to the way home insurance is sold.

It says insurers must better explain that sums insured should be based on the complete replacement costs of homes and contents.

It also wants documents to include guidance on the level of coverage in a policy and the sum insured, rather than simply referring consumers to the product disclosure statement.

The regulator says insurers should provide information about natural disaster risks and additional rebuilding costs after such claims.

The call follows a 2014 ASIC survey of 23 home insurance brands, provided by 12 insurers.

The regulator accepts home insurers have made improvements since a report on that survey.

Changes have included offering sum-insured calculators at point of sale, updated sales scripts and better access to online calculators.

Deputy Chairman Peter Kell says the regulator has been working with the insurance industry to better understand barriers to improved financial product advice.

“ASIC is keen to see industry make improvements in all the areas identified in our report,” he said.

“Our goal is to make sure consumers buy insurance that better meets their needs, including by helping to reduce levels of underinsurance, especially when there are natural disasters.”