Govt steps into premi­ums row

Port Douglas & Mossman Gazette - - FRONT PAGE - Angelique Pat­ter­son

THE Queens­land gov­ern­ment has joined the bat­tle against ex­ces­sive insurance premi­ums, while the rest of Aus­tralia bat­tles se­vere weather events.

Strata unit own­ers have been strug­gling with ex­treme cases of ris­ing insurance costs over sev­eral years, which has now crept into other mar­kets in­clud­ing houses and busi­ness premises, adding new voices to the fight against insurance run­away premi­ums.

And while Queens­land swel­ters in the un­event­ful heat as the risky state, the rest of Aus­tralia has ex­pe­ri­enced storms caus­ing wide­spread dam­age.

The Queens­land gov­ern­ment has pro­vided full ac­cess to flood data to the insurance in­dus­try un­der a mem­o­ran­dum of un­der­stand­ing signed this week, in an at­tempt to ad­dress the insurance af­ford­abil­ity cri­sis.

The pro­gram of works in­cludes an ex­change of data be­tween the Insurance Coun­cil of Aus­tralia and the gov­ern­ment, iden­ti­fi­ca­tion of ar­eas lack­ing flood map­ping data, con­sul- tation with ICA on fu­ture mit­i­ga­tion plan­ning and joint re­search and de­vel­op­ment to help as­sess ex­treme weather vul­ner­a­bil­ity.

Fed­eral MP for Le­ich­hardt War­ren Entsch has wel­comed the mem­o­ran­dum and said it was a very im­por­tant move.

‘‘It was the south east cor­ner of the state that was most af­fected by ma­jor flood­ing events, yet we here in the North and Far North have been equally pe­nalised - if not more,’’ he said.

‘‘By re­leas­ing this in­for­ma­tion through the MOU, in­sur­ers will have ac­cess to the most ac­cu­rate spatial and el­e­va­tion data and this should have a sig­nif­i­cant im­pact on prop­erty insurance in Far North Queens­land.

‘‘This is another piece of the puz­zle and I’m look­ing for­ward to bring­ing a whole range of other is­sues that im­pact on insurance af­ford­abil­ity in North­ern Aus­tralia to the roundtable, in­clud­ing the on­go­ing ten­dency by insurance com­pa­nies to as­sess based on post­code rather than on ac­tual risk.’’

Archers Body Cor­po­rate Man­age­ment man­ag­ing di­rec­tor Colin Archer has wel­comed the de­ci­sion by the Queens­land gov­ern­ment and would like to see the fed­eral gov­ern­ment take ac­tion against insurance premi­ums.

‘‘We still have a pretty ridicu­lous sit­u­a­tion in that strata insurance premi­ums have gone up six-seven fold over the last four years and it’s start­ing to af­fect home own­ers but it has only gone up three to four times for them,’’ he said.

‘‘It’s be­com­ing a ma­jor fac­tor in the val­u­a­tion of prop­erty in FNQ. While the av­er­age cost of insurance in Bris­bane is 5c per $100, in FNQ it’s more like 60 cents.

‘‘I’d like to see the gov­ern­ment re­spond to the gov­ern­ment in­quiry into insurance and the pa­per War­ren Entsch sub­mit­ted with his rec­om­men­da­tions and pro­pos­als on be­half of North Queens­land. We need them to con­sider them.’’

Mr Archer said the only build­ings de­mol­ished dur­ing Yasi were built pre 1970, be­fore the cy­clone code rat­ings were im­ple­mented, and prop­er­ties that have ad­hered to the rat­ing should be ac­knowl­edged by insurance com­pa­nies.

‘‘Yasi went straight over the path of Larry and didn’t do much dam­age be­cause all the re­built prop­er­ties were built to the code,’’ he said.

‘‘ The 1999 hail storm in Syd­ney, the New­cas­tle earth­quake and even the Bris­bane floods far ex­ceeded any pay­outs to both Larry or Yasi.

‘‘The big­gest risk event in Aus­tralia is earth­quakes and hail storm, they are the two big­gest insurance pay­outs - not cy­clones.’’

Mr Entsch agreed and said they al­ways name cy­clones up north but never name se­vere wind storms down south.

‘‘They don’t name se­vere wind storms in Syd­ney and Mel­bourne yet they get six to eight of them a year and don’t spend the ex­tra $40,000 to build a house to with­stand it,’’ he said. ‘‘We’ve had a sig­nif­i­cant re­duc­tion in cy­clones and the re­al­ity is post 1972 there has been a sig­nif­i­cant re­duc­tion in dam­age, a lot of veg­e­ta­tion dam­age but not prop­erty and the ex­pec­ta­tion is that even with global warm­ing they ex­pect less trop­i­cal cy­clones.

‘‘Forty per cent of Aus­tralia is north of the Tropic of Capricorn but only 4 per cent of the pop­u­la­tion re­sides there, which makes it easy for insurance com­pa­nies to cherry pick.’’

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