Size Matters - Where Small Is Not Beautiful

MELBOURNE – February 16, 2011: In recent weeks, we have observed commentators highlighting the need for clarity of disclosure in insurance documents.

In light of the recent floods, it is pleasing that Assistant Treasurer, Bill Shorten, has acted to assist those lodging home and contents insurance claims. At the Government’s prompting, the Insurance Council of Australia has agreed to apply a standard definition of flood insurance and to write policies in simpler language.

For many years, VACC has called for simpler language to be used in vehicle insurance documents. We have campaigned for clarity of disclosure about choice of motor vehicle repairer in vehicle insurance policies.

Mr Shorten has an ideal opportunity here to send a message to insurance companies, and to all organisations that produce important documents, that “simple language” includes things like size of print, choice of font and message placement.

“Fine print” is universally used and accepted as if it is a legitimate way of displaying information. We are so used to receiving documents that contain fine print that we take it for granted.

But this is wrong and insurance companies, and other organisations, should not be allowed to write anything in fine print.

Fine print is nothing more than code for small print which, in turn, is code for covering something up. If you deliberately make something hard to read by reducing the size of the print, then you are trying to deceive. The words used in the fine print may be factual and legally correct, but the very fact that this information is in small print makes it hard to read and hard to digest, and so it often falls into a consumer’s “too hard” basket.

So, what do insurance companies, and the like, hope to achieve by presenting hard to read information? I doubt they want to reduce the size of the print in order to cram more information on each page in an attempt to save the rainforests and reduce postage costs. The only possible reason is that fine print is used to put people off from reading specific things.

There is no need for fine print. If something is important enough to be included in a document, then it should be readable. And how do you make something easy to read? You produce it in an easy to read language and in a convenient size and font.

Insurance companies are very good at blazing across the top of documents all the benefits they offer and how good they think they are. But if there is an important exclusion, like choice of repairer in a vehicle insurance document, then it is often buried deep in the Product Disclosure Statement, in small print and written in insurance gobbledegook.

To assist motorists, VACC has painstakingly gone through every major vehicle insurance document, and picked out the section on choice of repairer. In a “Consumer Choice Comparison Table” on our website (vacc.com.au), we then ‘translated’ that information into plain English to explain to motorists whether or not they have choice of repairer.

On January 1, 2011, the Trade Practices Act became the Competition and Consumer Act, incorporating the new Australian Consumer Law – a national set of consumer protections. It is enforced by the Australian Competition and Consumer Commission (ACCC).

If ACCC is responsible for tackling unfair selling practices and unfair contract provisions, then I would argue that fine print in a contract is unfair on the policy holder. Insurance documents are important and policy holders have an obligation to read them and understand them. But, as hard as it is to relish the prospect of reading documents, the thought of deciphering small print and translating complicated language can be unpalatable.

The bottom line is that if something is important enough to be in writing, it should be clear and transparent. Fine print can only suggest that someone is trying to hide something. This practice does not reflect well on the organisation producing the documents and it certainly does not help the consumer.

It should not take a series of natural disasters to bring about change, but if insurance companies can make a quick decision to assist flood affected home owners, then they are capable of making a quick decision to assist motorists too.