Australian homeowners are a step closer to plain English in home insurance with the release today of a discussion paper on the Key Facts Sheet: Home Building and Home Contents Insurance Policies.

The Gillard Government will implement a mandatory Key Facts Sheet, a one page summary that clearly sets out what is covered and what is not covered.  It will improve homeowner’s understanding of their cover and make it easier to compare policies.

The Discussion Paper seeks public comment on the content, format, structure and provision of the Key Facts Sheet that will become mandatory for all home building and home contents insurance policies (combined and individual).

The Minister for Financial Services and Superannuation, Bill Shorten said, “Too many people are confused by lengthy insurance contracts and product disclosure statements. The Key Facts Sheet will improve the clarity of what is covered by home building and home contents insurance policies and will make it easier to compare different policies.”

"People are entitled to know exactly what is and what isn’t covered under their insurance policies,” he said.

“The release of this discussion paper brings us closer to a fairer, more transparent insurance system that meets the needs of the Australian community. It will help ensure consumers can make informed decisions about their insurance policies, particularly the level of flood cover they have."

The deadline for submissions is 23 March 2012.

The discussion paper can be found on the Treasury website at http://www.treasury.gov.au/contentitem.asp?NavId=037&ContentID=2322