Two identical houses. The same suburb. But each paying a home and contents insurance policy with a price difference of $1700!
Latest research by the Emergency Services Levy Insurance Monitor which surveyed 11 suburbs, found an average price variation of $1100 for “basic home and content policies.’’
For instance, in Medlow Bath, the highest home and contents policy was $2794 from GIO which was more than twice the lowest quote of $1106 from Coles, according to a report in the Sydney Morning Herald.
In East Gosford, the maximum home and contents policy was more than 2.4 times the lowest quote showing a price difference of $1461. In Bradbury, the price difference was $1700.
Professor Alan Fels, former ACCC chairman, says that while you expect to see some price differences across locations, such a big difference is worrying.
”It’s very concerning there are such big differences in prices quoted for the same property. It suggests that competition is not fully effective in this industry.’’
He also said that insurers were ignoring calls to list the previous year’s policy cost in their renewal notices something which is being introduced in UK from next month.
The Insurance Council of Australia chief executive Rob Whelan said that price comparisons were misleading because “each insurer’s policy is different.’’
They are. $1,700 different.
Mr Whelan said the Council was exploring the feasibility of listing last year’s premium on renewal contracts.
However, the Consumer Action Law centre senior policy executive Susan Quinn called for a comparison website.
“This would be a good first step and an improvements on transparency for consumers as it is.
“What’s really needed from the industry is to accept the onus for consumers being able to compare policies,’’ she told the SMH.