Rental car insurance faces reform under new consumer laws
Rental car insurance policies face reform under new consumer legislation designed to protect consumers.
Consumer Affairs Minister Chris Bowen last week announced the Federal Government will fast-track new laws with powers including civil penalties and disqualification orders.
Consumer Action Law Centre Director Policy and Campaigns Nicole Rich told insuranceNEWS.com.au new legislation will bring Australia into line with similar measures in the UK and Europe.
“At present a power imbalance allows businesses to include terms that unfairly and unnecessarily advantage them within their standard-form contracts,” she said.
Rental car insurance terms have faced media scrutiny after some customers paid extra for policies that offered little protection after an at-fault accident.
Ms Rich described car rental insurance as a classic example. She says truck and van rentals also expose renters to thousands in liability because the policies often exclude overhead damage, a common form of accident for people unused to tall vehicles.
Under the legislation national regulator the Australian Competition and Consumer Commission will take action on behalf of consumers to correct unfair trading practices.
“The issue of unfairness will apply if a consumer buys comprehensive insurance and it includes exclusions that a consumer would reasonably expect not to be there,” Ms Rich said. “The law is likely to say that if the term is unfair, then it is void.”
Consumer Affairs Minister Chris Bowen last week announced the Federal Government will fast-track new laws with powers including civil penalties and disqualification orders.
Consumer Action Law Centre Director Policy and Campaigns Nicole Rich told insuranceNEWS.com.au new legislation will bring Australia into line with similar measures in the UK and Europe.
“At present a power imbalance allows businesses to include terms that unfairly and unnecessarily advantage them within their standard-form contracts,” she said.
Rental car insurance terms have faced media scrutiny after some customers paid extra for policies that offered little protection after an at-fault accident.
Ms Rich described car rental insurance as a classic example. She says truck and van rentals also expose renters to thousands in liability because the policies often exclude overhead damage, a common form of accident for people unused to tall vehicles.
Under the legislation national regulator the Australian Competition and Consumer Commission will take action on behalf of consumers to correct unfair trading practices.
“The issue of unfairness will apply if a consumer buys comprehensive insurance and it includes exclusions that a consumer would reasonably expect not to be there,” Ms Rich said. “The law is likely to say that if the term is unfair, then it is void.”