Why car insurance companies pay out more to people with disabilities than other Australians
Posted September 24, 2018 06:06:23A new report from the Insurance Council of Australia has found that a growing number of car insurers are using a controversial practice called ‘disability discrimination’ to pay out extra premiums to people who have suffered physical or mental disabilities.
The report found that more than 100 insurers have now employed the practice, which involves charging premium rates that are far more than what would be charged to people without a disability, with some of the largest companies using the practice on average over 40 per cent of all car insurance policies in the country.
The practice has been controversial since it was first introduced in 2012, with critics arguing that it amounts to discrimination based on disability and that it could lead to the death of disabled people.
The council’s research found that nearly 70 per cent, or about 2.6 million, of all policyholders with disabilities had been discriminated against by car insurance firms, with one in five customers paying more than the actual cost of their insurance claim.
“We found that most of the affected individuals were women with children and children with disabilities, and the discrimination was most often directed towards women and children,” the council’s president of policy, Michelle Latham, said.
“Most people with physical or intellectual disabilities were excluded from the market and they were not included in any of the premium payments.”
This is discriminatory, because it excludes them from the marketplace and not providing them with a fair and equitable payment for their disability.
“The report also found that many people with a disability who are unable to pay for their own car insurance have had their premiums paid for through the system, and have not been compensated.”
In response to the findings, Mr Hodge, the Insurance Minister, said he was “not convinced that there is a significant gap between what car insurance people are paying and what people with disability are getting”.””
The insurance industry does not want to pay the people who can’t pay because it’s not fair and it’s discriminatory.”
In response to the findings, Mr Hodge, the Insurance Minister, said he was “not convinced that there is a significant gap between what car insurance people are paying and what people with disability are getting”.
“I believe that this is a policy that is providing a fair, reasonable and affordable payment for those who have a disability,” he said.
The ACCC says the industry should pay more attention to disabled consumersWhen the Government announced its changes to car insurance in January, it promised to provide $100 million over three years to provide “the most accessible, high-quality, affordable and high-value car insurance available to Australians”.
The government says it is aiming to make the system more accessible to people on low incomes, with the scheme targeting people with lower incomes who can not afford the premium.
The reforms include introducing a single deductible, which means people with incomes between $25,000 and $75,000 will have their premiums reimbursed by the government.
“It’s also a significant step forward for Australians who can pay and it is a step forward in ensuring that the industry is delivering affordable car insurance,” Ms Lamont said.
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