Nearly one in six Australians (15.1%) do not read their insurance policy documents, leaving them unaware of policy exclusions and other conditions, according to comparison service Compare the Market's latest research.
Compare the Market surveyed 1,004 Australian adults aged 18 years and over in July 2023. It found that Gen Z (21.3%) would most likely never read their product disclosure statements (PDS) compared to other age groups. They were followed by Gen X (18.7%).
Concerningly, Gen Z and Gen X were most likely to admit that they did not know what an insurance policy document was. However, the Gen Z age group had the most people who read their PDS cover-to-cover (30.8%).
Adrian Taylor, general manager of general insurance at Compare the Market, delved into the dangers of not reading insurance policy documents.
“If people are already spending money on protecting their homes or cars, it's worth knowing how and what they're protected for. By not reading the PDS or policy documents that come with the insurance, they may be missing out on vital information relating to what their policy does or does not cover,” Taylor said. “For example, it may surprise people that in most cases, home and contents [insurance] doesn't cover damage caused by termites, birds, and other vermin, though some insurers may offer this cover as an optional extra and charge a higher premium.
“Even if people switch from one insurer to another for relatively the same cover, it's important for them to read through their new policy documents, as these will also vary between insurers.”
Taylor further recommended reading the full disclosure statement for each insurance policy.
“By understanding what is covered and the policy exclusions, you may be able to adjust some of your habits to ensure you're still able to claim on your insurance if the worst happens. For example, you may stop leaving the keys in or near your car at night, which may void possible claims if the vehicle is stolen,” he said. “And if people find that their insurance does not cover their needs, by comparing a number of policies from a variety of providers, they may find cover that better matches their needs, and they may also find cover at a better price.”
