INSURANCE PREMIUMS INCREASE AFTER YEAR OF CATASTROPHES
ROLLING natural disasters over the past 18 months including bushfires, storms and floods have sent the average home-and-contents insurance premium skyrocketing.
A comparison of sample premium quotes from eight insurers by financial comparison site Canstar has revealed the average yearly cost of $550,000 of building cover and $50,000 of contents cover has shot up by almost 14 per cent in one year.
Victorians, who have now submitted more than 4000 claims relating to last week’s earthquake, saw the steepest increase with the average policy in the state shooting up 19.3 per cent to $1433. But residents of cyclone-prone north Queensland still have the highest overall average premium cost of $4813, an increase of 14 per cent.
Canstar finance expert and executive Steve Mickenbecker said north Queensland’s higher premiums showed the impact more frequent severe weather had on premiums.
“Canstar’s research confirms this increase in the frequency and severity of extreme weather corresponds with a rise in home-andcontents insurance premium prices,” he said.
He said the price increases also reflected an expectation that there would be heightened severe weather events this summer. “Insurers don’t wait for a storm before putting premiums up, but apply increases when they form a view the risk has increased,” he said.
The premium price rise comes after insurers were hit with a wave of claims over the past 18 months relating to the 2019-20 black summer bushfires and the hailstorms, floods and storms that followed. Canstar analysis of Australian Prudential Regulatory Authority data shows these events resulted in more than 116,600 building claims and more than 51,400 contents claims.