Car insurers automatically renewing annual premiums will be clearer about their policies after customer complaints about surprise charges.
Some caught-out consumers have had bank accounts overdrawn because of unexpected direct debits, or have already paid another company for cover before being charged.
Insurers have agreed to update telephone sales scripts and place clearer, more prominent messages on websites after an Australian Securities and Investments Commission review revealed most consumers were only alerted in the product disclosure statement and renewal notice.
These disclosure improvements will help reduce the risk of consumers being caught by surprise
AAI Limited (Suncorp Group), Auto & General Services Pty Limited, CGU Insurance Limited (Insurance Australia Group Limited), The Hollard Insurance Company, Progressive Direct Insurance Company and Youi perform automatic annual car insurance renewals.
"Automatic renewal of insurance may be convenient for some consumers but it is important that this is an informed choice," ASIC deputy chair Peter Kell said. "These disclosure improvements will help reduce the risk of consumers being caught by surprise."
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