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Automated disclosure of driving records and claim history should be introduced to prevent denial of claims for those unaware that they have not provided key information to insurers, according to the Financial Rights Legal Center (FRLC ).
Governments should work with the general insurance industry to allow details to be pre-populated as auto policies are purchased, recommends an FRLC report released today.
“We are already able to enter our registration numbers and pre-fill our vehicle details when we get an insurance quote – we should be able to do the same with our driving records and our claim history. ‘insurance, â€said Karen Cox, CEO of Financial Rights.
“This is our own data held in databases by road authorities and insurers – we should be able to use it to pre-fill our statement of insurance to make sure we get the right coverage. ‘assurance.”
The report, Automating General Insurance Disclosure, examines 186 Australian Financial Complaints Authority (AFCA) decisions based on non-disclosure litigation and 190 financial rights cases from 2018 to last year.
Four insurers accounted for around 80% of AFCA nondisclosure litigation last year, including Auto & General (26%), AAI (Suncorp Group) (22%), Hollard (17.9%) and Allianz (13.4 %), the report says.
The report recommends that these companies review their processes for evaluating quotes, sales and complaints to reduce the incidence of denials due to non-disclosure.
FRLC says regulatory change that took effect this month from a ‘duty to disclose’ to a ‘due diligence duty’ will not end the problems, as insurers will continue to rely on flawed memory or keeping random records to get the information they need.
“No matter how clearly the question is asked, if people don’t know the correct answer, they can’t provide it,” the report said. “Practically speaking, nothing has changed the fact that full disclosure may not happen and people can unwittingly drive on the roads without being insured.”
Financial Rights says information pre-filling is available in the UK through the MyLicence program and an Australian version should be developed.
The report is the second in a series on the future of insurance, the first examining the implications of an expected extension of consumer data law (CDR) reforms to the industry, following their introduction last July in the banking sector.
The reforms aim to make it easy for consumers to access their data and allow their secure disclosure to accredited third parties.
CDR could ease the disclosure process by requiring insurers to lift data collection standards and improve consistency to ensure information is accurate, says today’s report. It also calls on insurers to fund a program to improve the reliability of the consumer data they hold.
The report is available here.
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