How to reduce insurance costs
New tool an asset for home buyers
HOME buyers and owners can now find out how climate events affect house prices and insurance premiums, information previously only available to banks and providers.
Property risk analysis company, Climate Valuation’s new climate risk portal can generate a tailored report that illuminates a house’s resilience to future climate events. Such knowledge was once exclusively available for insurance companies and banks, which they would use to their benefit.
“We’re seeing a lot of stories where people are on the front page of the paper saying, ‘I got flooded out and I don’t have insurance,” Dr Karl Mallon, a climate risk expert and chief executive of Climate Valuation, said.
“People are buying houses but are then finding the insurance is more expensive than they expected, or there’s the situation where everything is going smoothly but then the insurance premiums start to go
through the roof.
“What we’re trying to do is allow home buyers to look into the future to see if they will be able to stay insured over a 10, 20 or 30-year mortgage.”
The portal’s reports cost $70 to $99 and are suitable to use before making an offer.
Free versions are also available for home buyers scouting the market and poking their heads through several doors.
“These reports are a way of looking at a property with commercial-grade hazard information,” Dr Mallon said.
“The commercial report is also for homeowners wanting to get their property sale-ready.”
Cairns real estate agent Udo Jattke said high insurance prices meant some homeowners in the Far North were still paying a mortgage after paying off their actual mortgage.
“I have seen lots of evidence, especially for pensioners, where people can’t afford the insurance on their house,” Mr Jattke said.
“When people down south are buying up here they’re saying ‘wow, your body corporate fees are high’. But it’s the insurance part that’s driving those fees up. That shouldn’t be.”
Mr Jattke said increasing competition was starting to put downward pressure on prices and he recommended owners continue to shop around.
“My house (insurance) was about $3000. We shuffled it around and now its $1200. The competition will drive that insurance price down, especially on houses not in the flood zones or those built to cyclonic standards.” Climate Valuation’s range of reports can be found on its website.