The Federal Court has today found that a term requiring policy holders to notify Auto & General Insurance Company Limited (Auto & General) of any changes to their home and contents is not unfair under the ASIC Act.
ASIC alleged that the term was unfair as ASIC considered it:
- imposes an obligation on customers to notify Auto & General if ‘anything’ changes about their home or contents (with a non-exhaustive list of examples), which imposes an unclear obligation on the customer regarding what they need to disclose to Auto & General.
- suggests that Auto & General has a broader right to refuse claims or reduce the amount payable under claims if the customer does not meet the notification obligation than is available under the Insurance Contracts Act.
- could mislead or confuse the customer as to their true obligations and rights under the contract.
ASIC Deputy Chair Sarah Court said ‘ASIC pursued this case as part of its consumer protection focus on unfair contract terms in insurance contracts. ASIC believes that contract terms, especially those in standard form contracts, should be proportionate, transparent and clear so that consumers can readily understand their rights and responsibilities under the contract.’
ASIC is considering the judgment.
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Background
On 4 April 2023, ASIC commenced proceedings against Auto & General in the Federal Court (23-088MR). The alleged unfair contract term appeared in the following product disclosure statements issued by Auto & General:
- Auto & General Home and Contents Insurance Policy PDS
- Budget Direct Your Home & Contents Insurance Policy PDS
- Australia Post Your Home & Contents Insurance Policy PDS
- ING Home & Contents Insurance Policy PDS
- Catch Insurance Your Home & Contents Insurance Policy PDS
- Virgin Insurance Your Home & Contents Insurance Policy PDS
- Qantas Home and Contents Insurance Policy PDS.
The Auto & General Home and Contents Insurance Policy PDS applies to 1st For Women, Best Buy, Maxxia, Ozicare and Retirease branded home and contents insurance policies issued by Auto & General.
Auto & General no longer issues new home and contents policies for the Australia Post, Catch Insurance and Maxxia brands.
On 4 May 2023, Auto & General issued Supplementary Product Disclosure Statements (SPDS) for its home and contents insurance products that, among other things, replaced the term that was the subject of these proceedings.
On 21 September 2023, Auto & General issued new Product Disclosure Statements for its home and contents insurance products that contained the SPDS replacement term.