ON THE SOAP­BOX In­sur­ance cri­sis is get­ting worse

Port Douglas & Mossman Gazette - - FRONT PAGE -

I N ALL my time in pol­i­tics, few is­sues have re­quired as much per­se­ver­ance, or gen­er­ated such a surge of community sup­port, as that of work­ing to­wards a way out of the North’s prop­erty in­sur­ance cri­sis.

When peo­ple are forced to leave their most val­ued pos­ses­sions - their homes and their busi­nesses - unin­sured and un­pro­tected, it beg­gars be­lief that those at the high­est lev­els can continue to deny there’s a prob­lem.

The Pri­vate Mem­ber’s Mo­tion that I have drafted is com­pre­hen­sive, seek­ing to ad­dress a range of is­sues in­clud­ing the avail­abil­ity and af­ford­abil­ity of poli­cies, the le­gal re­quire­ment for mort­gage in­sur­ance, the fi­nan­cial and per­sonal stress on fam­i­lies, and the need for in­ves­ti­ga­tion into gov­ern­ment un­der­writ­ing of in­sur­ance. It is now await­ing ap­proval.

Un­sur­pris­ingly, it has al­ready met with re­sis­tance from the In­sur­ance Coun­cil of Aus­tralia, which has reit- er­ated that it doesn’t be­lieve there is a prob­lem. This ’head in the sand’ at­ti­tude is prov­ing to be ex­tremely dam­ag­ing.

From across North­ern Queens­land, I have been con­tacted by home own­ers, land­lords, busi­nesses, ru­ral prop­er­ties and tourism icons. For many, the is­sue is now not about huge in­creases, but about find­ing any cover at all af­ter be­ing re­peat­edly re­jected by both do­mes­tic and in­ter­na­tional in­sur­ers.

In Cook­town, the Hill­crest Guest House has been unin­sured since Jan­uary, and the iconic Lion’s Den pub since March, both un­able to get any cover due to their lo­ca­tion.

Cairns prop­erty man­ager Linda Tuck tells me that in­sur­ance with Vero on her res­i­den­tial home has gone from $900 two years ago to $2929.72 with a $1000 ex­cess. Yet quotes us­ing an iden­ti­cal prop­erty, but in dif­fer­ent post­codes, re­veal that cover in Perth, Mel­bourne or even flood-rav­aged Bris­bane would cost be­tween $1200-1300. And sur­pris­ingly, in Dar­win, in­sur­ance could be pur­chased for $1633 - de­spite cy­clone Tracy in 1974 al­most de­stroy­ing the city.

I have passed on many of these case stud­ies to il­lus­trate not only peo­ple’s fi­nan­cial chal­lenges, but the emo­tional toll they face in strug­gling to find cover for their prop­er­ties. I dare the ICA to re­peat, “There is no prob­lem” af­ter read­ing these.

Con­cern has also been raised about the fi­nan­cial im­pli­ca­tions of what is seen as “gov­ern­ment in­ter­fer­ence” in the in­sur­ance in­dus­try. What many peo­ple don’t re­alise, and the in­dus­try/gov­ern­ment is un­will­ing to pub­li­cise, is that within the last decade the gov­ern­ment has al­ready in­ter­vened in the in­sur­ance in­dus­try - and suc­cess­fully.

In 2003, fol­low­ing the at­tacks of 9/11 and the with­drawal of ter­ror­ism in­sur­ance cover by in­sur­ance com­pa­nies, the Howard Gov­ern­ment es­tab­lished a scheme for re­place­ment ter­ror­ism rein­sur­ance for com­mer­cial prop­er­ties.

The scheme just been pos­i­tively re­viewed for the third time, with the Gov­ern­ment di­rect­ing the pool to pay a div­i­dend to the Com­mon­wealth of $400 mil­lion.

Now, there is lit­tle doubt that there has been mar­ket fail­ure in the pro­vi­sion of prop­erty in­sur­ance in North­ern Aus­tralia. My ques­tion is, why can we not get ac­cess to these funds - or a sim­i­lar mech­a­nism - to help peo­ple liv­ing above the Tropic of Capricorn, so they can af­ford in­sur­ance un­til such time as the pre­mi­ums drop again?

It is not in­tended as a long-term so­lu­tion - ide­ally we want, and need, a pri­vate in­dus­try that is both af­ford­able and sus­tain­able. How­ever, for a rel­a­tively short-term so­lu­tion, it has merit and should be prop­erly in­ves­ti­gated.

It is clear that some­thing needs to be done, and soon, which is why I will continue to fight for equal ac­cess to prop­erty in­sur­ance for North­ern Queens­lan­ders.

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