Improved pet insurance disclosure welcomed
The Australian Securities and Investments Commission (ASIC) has reported on improvements made to disclosure in pet insurance product disclosure statements (PDSs) in response to concerns raised by ASIC.
ASIC's review identified concerns about disclosure in some pet insurance PDSs and promotional online material including:
- Insufficient or confusing disclosure about policy limits, pre-existing conditions (including conditions that consumers are likely to consider unusual or unexpected) and policy exclusions.
- Insufficient disclosure or non-disclosure of the need for consumers to make co-payments and pay excesses in the event of a claim. Our review found that excess amounts can be up to $500, and co-payment amounts (where the insured is liable to cover some of the costs of the claim) can be up to 35%. For some policies, co-payments may be required for the life of the policy. Other policies may require co-payments to be made when a pet reaches a certain age. In addition, some policies require the payment of excesses as well as co-payments when a claim is made.
- The use of worked examples of benefit amounts and other promotional material conflicting with or not accurately reflective of the policy
- Representations comparing pet insurance to health insurance (which is a different type of insurance product with different features of cover).
After ASIC raised these concerns with the relevant pet insurers and distributors, they agreed to address the issues by improving disclosure in the PDSs and promotional materials, including websites.