Archive, Industry News

Industry seeks clarity over add-on insurance move

Three associations welcome exemption but want incidental-storage detail


Trucking companies and their customers will keep convenient access to add-on insurance under a draft exemption from new requirements.

The Australian Trucking Association (ATA), Australian Livestock and Rural Transporters Association (ALRTA) and Australian Furniture Removers Association (AFRA) welcomed the exemption for add-on transport and delivery insurance products but have sought more clarity about incidental storage.

The federal government is introducing a new deferred sales model for insurance that would prohibit the sale of add-on insurance for at least four days after a customer has purchased a product or service.

“Livestock and rural carriers are often called on to move livestock or high value items at short notice, including livestock sold at auction where the owner, value and destination are not known before the sale,” ALRTA executive director Mathew Munro said.

AFRA executive director Simone Hill added: “And in the removals industry, 22 per cent of customers book their move within five days of service. In some places, this could be up to 50 per cent of customers. 

“These moves include the industry’s most vulnerable customers, including victims of domestic violence, persons under threat of natural disaster or where the building is at risk, moves into and out of aged care and other situations.”

Read how ALRTA viewed the government’s exemption intention, here

Acting ATA CEO Bill McKinley noted that the federal government’s exposure draft of the exemptions from the model included an exemption for add-on transport and delivery insurance products. 

“The exposure draft addresses many of the industry’s concerns about the deferred sales model, but the exemption should in our view be amended to include incidental storage,” McKinley said. 

“Incidental storage is part of the normal movement of livestock transport, including the need to unload livestock on long journeys, storage close to export vessels and abattoirs, and storage as a result of unforeseen changes to the journey or the need to change vehicle combinations,” Munro said.

This is important, too, for AFRA.

“In the removals industry, incidental storage is also critical,” Hill said.

“It is needed in a variety of scenarios, including storage between an initial move and when goods can be delivered to a customer’s new premises, as well as incidental storage at transport depots ahead of long distance moves.” 

The deferred-sales model is a response to a recommendation of the Financial Services Royal Commission. 

The government opened a three-week consultation process that ended on August 6.

“The deferred sales model will enable consumers to make informed decisions on add-on insurance product purchases,” it explained.

“It will do so by introducing a pause in the sales process between the purchase of the primary product and the purchase add-on insurance.

“This pause, or ‘deferral period’, will enable and encourage consumers to consider the merits of the insurance offered and to compare this insurance with alternative products.”

The key consultation documents can be found here.

The joint industry submission can be found here.


Previous ArticleNext Article
Send this to a friend