Warning on insurance
Broker urges overhaul of industry in FNQ
CAIRNS homeowners have been urged to stop being loyal to insurers and shop around in the wake of an Australian Competition and Consumer Report that recommended an overhaul of the insurance industry in North Queensland.
Cairns Mortgage Broker Roger Ward will make a submission on the ACCC’s recommendations as part of his campaign for a state government insurance office.
He said a government-led intervention into what he described as “market failure” in the insurance sector was the only answer to reducing the costs for FNQ households.
“The sleeping issue here is high insurance costs are driving underinsurance or no insurance,” Mr Ward said.
“A lot of people are taking up insurance just for cyclone season, leaving them uninsured for the rest of the year.
“I personally think this is the biggest financial issue the state has had in 30 years. It is right up there with electricity prices, in some cases insurance costs are outstripping electricity prices.
“When a cyclone hits a major centre, only then will we understand the effects of under insurance and no insurance.”
He said the ACCC’s recommendation to start a direct comparison site for insurance products, one of 15 handed down this week, was the most useful in the short term.
“Insurers up here are just cherry picking postcodes with a low risk profile. That’s well and good if you’re a business, but the facts are we’re really looking for a social contract with the insurance industry,” Mr Ward said.
“The number one thing people can do is not be loyal to their current insurers. Every time they get to renew their insurance, they should get on the phone and get on the internet and shop around.”
Mr Ward will recommend the resurrection of the stategovernment funded SGIO insurance company. He said only government intervention could fix the problem.
United Australia Party North Queensland Secretary Jen Sackley recommended an expansion of the Australian Re-Insurance Pool Corporation to allow more insurance companies into the market, creating competition and driving down prices.