Insurers will always tell you to read the Product Disclosure Statement for your insurance. Apart from the fact there’s information in the Product Disclosure Statement that insurers must tell you by law, they also want you to understand the product you’re buying.
Not all insurance is the same. That’s why every different insurance product will have its own Product Disclosure Statement, or PDS as it’s widely known. The PDS sets out the full details about your cover and any limits, exclusions and conditions that may apply. It should be read together with your Policy Schedule.
An insurance PDS explains all the terminology the insurer uses, to make sure you understand exactly what the insurer means by terms such as “site” or “sum insured” and many others.
All the details are covered in the PDS and any supplementary PDS. The PDS and the Policy Schedule forms the agreement between you and the insurer, for example, are the contents of my home covered for theft? What is the maximum I can claim for certain items? Am I covered for certain events? What if an item is stolen but it was not in my home at the time? Or if an item was stolen from my home but doesn’t belong to me?
The PDS also includes important information about your rights – such as what happens if you change your mind and want to cancel your insurance, and who to contact if you have a dispute with your insurer.
The PDS also puts you in the picture about how the claims process works. And the conditions of how the insurer will settle a claim.
Public liability is another complex area of insurance which should be fully explained in the PDS. What most people don’t realise is that by insuring their home or contents, they may also be insuring themselves against the risk of legal liability to a third party.
Legal liability is the risk of you causing injury to someone else – or damage to another person’s property – and that person then suing you for compensation. Third party liability insurance is an important feature of most home and contents insurance policies. But make sure you read the PDS for the conditions!
If there are any optional benefits offered by your insurer in return for a slightly higher premium – then the PDS will explain how those scenarios would apply too.
It’s an important document. Don’t purchase any insurance product without reading the Product Disclosure Statement first to make sure the product is suitable for your needs!