Com­mon­wealth to ques­tion greedy in­surance price hike

Port Douglas & Mossman Gazette - - NEWS - RICHARD KOSER

A FED­ERAL Gov­ern­ment in­quiry into the in­surance in­dus­try holds some hope for lo­cal own­ers of strata-ti­tled units who have been stung by an un­prece­dented rise in their pre­mi­ums.

The in­quiry will look at the level of in­surance in disas­ter-prone ar­eas and con­sider whether the Gov­ern­ment needs to es­tab­lish a fed­eral backup in­surance scheme for in­di­vid­u­als or com­pa­nies un­able to ob­tain or af­ford in­surance.

The of­fice of the Queens­land Deputy Premier Paul Lu­cas told a lo­cal prop­erty man­ager the in­quiry would in­ves­ti­gate a num­ber of is­sues re­lat­ing to strata ti­tle units, in­clud­ing “whether there is a role for the Com­mon­wealth Gov­ern­ment in pro­vid­ing disas­ter in­surance or rein­sur­ance to the pri­vate sec­tor”.

The Deputy Premier’s se­nior pol­icy ad­vi­sor said she was “alarmed” by the dra­matic in­crease in pre­mi­ums and said the Fed­eral Gov­ern­ment “is con­cerned that ap­pro­pri­ate na­tional mea­sures are in place to fos­ter more com­plete shar­ing of risk and eq­ui­table shar­ing of the cost of dam­age and loss re­sult­ing from floods and other nat­u­ral dis­as­ters”.

Op­tions be­ing con­sid­ered by the in­quiry in­clude sub­si­dis­ing in­surance for in­di­vid­u­als and small busi­nesses in ar­eas where pre­mi­ums are high­est.

How­ever, the in­quiries will not pro­vide any im­me­di­ate re­lief.

Lo­cal prop­erty own­ers have been slugged by sky-rock­et­ing pre­mi­ums over the past few months.

Pre­mi­ums were al­ready head­ing through the roof in Jan­uary, be­fore record-break­ing floods and Aus­tralia’s largest ever cy­clone dev­as­tated Queens­land, with in­surance gi­ant Zurich boost- ing rates by a mas­sive 350 per cent.

“A rein­sur­ance scheme sim­i­lar to what ex­ists in New Zealand would be a good idea,” Par­adise Links re­sort co-owner John Car­ney said.

“They have a nat­u­ral disas­ter fund, so when some­thing like the Christchurch earth­quake hits, the re­con­struc­tion is paid for out of the fund.

“I think in­surance com­pa­nies are hav­ing a lend of us.

“There haven’t been any dis­as­ters up here, no big claims for 20 years, but our pre­mi­ums dou­bled last year.

“I dread to think what our next quote will be.”

The cur­rent Queens­land Gov­ern­ment flood in­quiry is also prob­ing the in­surance in­dus­try.

The fo­cus of the Queens­land in­quiry, how­ever, is on whether com­pa­nies have been honouring their flood poli­cies rather than on the price of those poli­cies.

Not happy: the

front page on Jan­uary 27

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