Insurance on agenda
AUSTRALIA’S increasing home insurance affordability crisis is set to hit Queensland harder than any other state, with nearly 200,000 houses predicted to be effectively “uninsurable” by the end of the decade.
New modelling from the Climate Council reveals one in 16 Queensland homes (6.5 per cent, or 193,232 dwellings) are projected to be “high risk” for insurance purposes by 2030.
This contrasts with a nationwide average of 4 per cent.
A list of the federal electorates most at risk of a home insurance affordability crisis in 2030 is dominated by Queensland seats, with the seats of Moncrieff and Wright alongside Griffith, Brisbane and Maranoa in the top 10.
According to the Australian Competition and Consumer Commission (ACCC), one in nine homes (11 per cent) are now covered by no insurance at all, and the proportion is even higher in some regions: 17 per cent in North Queensland, 26 per cent in the Top End and 40 per cent in the north of WA.
The ACCC found the cost of premiums has jumped 52 per cent in a decade, and a massive 178 per cent in the north. People in northern Australia are now paying an average of $1900 a year for their home insurance, while the rest of the country is paying less than half that – $900.
The increases for policies have been attributed to the increasing incidence of extreme weather events, illustrated most vividly by the back-to-back floods that hit Queensland and Northern NSW in February and March.
The Climate Council estimates more than half a million Australian properties will face annual premiums exceeding 1 per cent of their market value by the year 2030. For a family home worth $500,000, this would mean premiums costing $5000 every year.
Industry critics say such costs make properties “uninsurable”, but the industry disputes the tag.
“At present there is no area of Australia that is uninsurable, although there are some locations where there are clearly affordability and availability concerns,” an Insurance Council of Australia spokesperson said.
The Insurance Council said climate change was “worsening extreme weather events, which has implications for affordability and availability of insurance”. In February, the Insurance Council called on the federal government to boost funding for resilience measures such as flood levees and cyclone-proofing of homes.