Why car insurance companies pay out more to people with disabilities than other Australians

  • October 7, 2021

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.

Topics:health,car-insurance,accidents,australia,nsw,act,aus,canberra-2600More stories from Victoria

How to save on car insurance costs in 2019

  • July 23, 2021

Insurance companies are offering consumers the chance to get the most bang for their buck in 2019.

As well as paying more for car insurance for many people, some states are offering subsidies for car owners to offset the cost of car insurance premiums.

New South Wales is offering an incentive of $100 per year to drivers on its car insurance scheme, which has been expanded in 2017 to include drivers on private health insurance.

New Hampshire has offered incentives of up to $1,000 per car for drivers who sign up for car sharing services.

Motorists on private insurance schemes could also get an incentive payment of $1 per $1 of premium they pay in 2018.

While some states have introduced incentives to encourage people to sign up, other states such as South Australia have not.

The Australian Competition and Consumer Commission said that some insurance companies were misleading consumers by offering incentives that were “simply not there”.

“It is not a legitimate incentive to use your car insurance to help cover the costs of your health insurance, it is simply a ploy by insurance companies to get people to switch to private health or dental insurance, so they can get some extra cash to cover their health insurance costs,” it said in a statement.

“These are often poorly understood incentives that do not provide consumers with a competitive advantage.”

Insurers should be upfront about their motives and should not seek to make a profit by offering this type of incentive.


Aaa car insurer says it will stop selling Aaa after it loses $1bn in market share

  • June 29, 2021

The Aaa Automotive Group has announced that it will suspend its car insurance business and will sell its insurance products in a different fashion. 

The company said it would focus its insurance business on smaller-sized vehicles and “be more focused on the insurance industry’s needs”.

“In order to deliver a more competitive insurance business, we will focus on offering a wide range of products in 2018 and beyond,” the company said in a statement.

“We will continue to deliver premium car insurance products and will offer our customers the most advanced technology to meet the evolving needs of the auto industry.”

The news comes as Aaa, the world’s second-largest car insurer, is facing criticism over its handling of its own car insurance and the risk-management program, which is under scrutiny for being overly complex and expensive.

In October, the US Department of Justice filed a civil suit against the company alleging it has “violated” the terms of its policies.

The Justice Department alleges that Aaa’s auto insurance policy policies fail to cover the costs of a driver’s death, including the driver’s medical costs.

Aaa’s chief executive, Gary D. Fink, has said that the company will fight the allegations in court, and has called for an overhaul of the company’s risk management system.