insurance policy form

Review of insurance law announced

A long-awaited review of insurance law has been announced by Minister of Commerce and Consumer Affairs Kris Faafoi.

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We’ve been calling for an overhaul of insurance law to give consumers better protection. Minister Faafoi agrees there are significant problems with the law that need to be fixed. The review will look at several issues we want addressed, including unfair contract terms.

Insurance policies remain largely excluded from the ban on unfair terms that applies to other consumer contracts. Unfair terms include those that give the company rights to make wholesale changes to your cover or penalise you for cancelling the contract.

Disclosure is another major issue. When you take out or renew an insurance policy, you have to tell the insurer any “material facts” that could influence its decision to insure you or the terms of your cover. If you fail to disclose something the insurer deems material, it can cancel your policy and refuse your claim.

It doesn’t matter if your omission was deliberate or accidental, or if it has any bearing on your claim. Other countries have passed legislation to protect consumers in cases of accidental or innocent non-disclosure. Similar protections are needed here to make our insurance market fair.

How you can help

If you’ve been stung by an unfair insurance term or got a raw deal from your insurer, let us know: email aneleise@consumer.org.nz to help with our campaign.

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We’re campaigning to end expiry dates on gift cards, prevent unwanted door-to-door salespeople, stop unfair contract terms and more. Learn more about these campaigns and get involved.

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