Tab 1 of 6 · Key facts sheets
The key facts sheet: one standard format for home and contents cover
A key facts sheet is a short summary that insurers must provide for home building and home contents insurance, in content and layout set by regulation. Because the government prescribes the information and the layout, Moneysmart describes it as a way to compare policies like for like; the product disclosure statement still holds the detail.
Which policies have one
The rules sit in Division 4 of Part IV of the Insurance Contracts Act 1984, which lets the regulations declare classes of contract to which the key facts sheet duty applies. The Insurance Contracts Regulations 2017 declare two: a home buildings insurance contract and a home contents insurance contract.
Those are the only two classes the regulation names, so car insurance has no key facts sheet under these rules. For a car policy, the product disclosure statement is the document to read (see the PDS and the TMD).
The specification
A page built to a drawing
Section 12 of the Regulations does something unusual for a law: it fixes the typography. The information must follow Form 1 in Schedule 5 for buildings or Form 2 for contents, and its layout is specified down to the point size.
| Element | The rule |
|---|---|
| Content | The information in Form 1 (home buildings) or Form 2 (home contents) of Schedule 5, completed the way the form specifies |
| Paper | A4 |
| Typeface | Arial |
| Heading | The heading starting with the words “KEY FACTS” in 18 point |
| Steps | The word “STEP” in 16 point, and the number after it in 48 point |
| Small print | The footnote after step 2 in 8 point; everything else in 10 point |
| Colour | Headings, subheadings and the policy name in blue on white; the top box of step 2 and the box in step 3 in white on blue; the other step 2 boxes alternating black on white and black on light blue; the rest black on white, with enough contrast to read easily |
The point of all that sameness is the comparison. Two insurers’ sheets put the same kind of information in the same place, so a difference between them is a difference in the policy, not in the design.
When it has to reach you
Under section 13 of the Regulations, the insurer must provide the sheet as soon as reasonably practicable, and no later than 14 days, after whichever comes first of these:
- you first ask the insurer for information about the contract; or
- you enter into the contract (an extension, variation or reinstatement does not count as entering into it).
It can come electronically if you ask for that. And an insurer with a public website must keep the current sheet for each of these policies on that website, in a form anyone can download. That last rule means a sheet can be read before anyone is asked for details.
The duty has teeth: section 33C of the Act names a civil penalty of 5,000 penalty units for an insurer that does not provide the sheet as the regulations require, but under section 75D the most a court can order may be higher, and for an insurer that is a company it is at least ten times that.
When the insurer does not have to send one
Section 13(5) lists the exceptions. The insurer is not required to provide the sheet if:
- it has already given you the sheet, and the sheet has not changed since apart from its date;
- it reasonably believes someone else has already given you the sheet, again unchanged apart from the date;
- you asked an insurance broker for information about the contract, or you take out the contract through a broker who is not acting as the insurer’s agent;
- you have not given the insurer a postal or electronic address to send it to; or
- you have told the insurer you do not want it.
In other words, buying through a broker who acts for you, rather than for the insurer, is one of the situations where the sheet may not arrive on its own; the insurer’s website copy is still there to download.
What the sheet cannot do
Section 33D of the Act says plainly that an insurer giving you a key facts sheet does not count as “clearly informing” you of the matters in it. Under the Act, being clearly informed in writing is what an insurer has to show in some situations, for example before it can rely on a standard-cover exception, so the summary cannot stand in for that.
Moneysmart’s advice runs the same way: use the sheet to compare, then download the product disclosure statement to understand the detail of what is covered.
Two sheets side by side
Moneysmart lists what to check when comparing home insurance policies. Each line is something to find on both sheets and then confirm in each PDS:
- Premium: compared for the same type and level of cover.
- Excess: how much it is, and whether a higher one would change the premium.
- Exclusions: the events, items or types of damage not covered, and any caps, limits or special conditions.
- Legal liability cover: whether injury to other people, or damage to their property at your home, is covered.
- Extended cover: whether there is cover above the sum insured if rebuilding costs more than expected after a total loss.
- Cover limits: the most you can claim for certain items, events or benefits.
For contents, Moneysmart adds two more lines: whether belongings are valued at replacement value or at their value at the time, and how a claim is settled (the insurer replacing items, or cash). The sum insured itself has its own tab.