The General Insurance Ombudsman has expressed concern that workers in the industry do not always understand the policies they sell.
The fears have been raised as the insurance industry tries to rebuild its reputation, which was tarnished by its handling of last year's cyclones, floods and bushfires.
In all there were eight official disasters, 275,000 claims and losses of $5 billion.
Ombudsman John Price told AM there must be a greater focus on training and communication in the industry to ensure frontline staff provide customers with clear information.
"Policies do not clearly inform individuals, and it's not only the consumer that's confused - it's also the salespeople that are confused," Mr Price said.
"And if the salespeople trained by the industry are confused as to what the cover offers then how do you expect the consumer to understand?"
The industry is trying to head off tougher regulation of policies and payouts after complaints that some claims were either unpaid or unresolved.