Govt steps into premiums row
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.’’