DOUBLE TAKE: RAW INSURANCE DEAL FOR BUSINESS
North Qld industries are taking desperate
Small businesses like Townsville’s C Bar are bearing the brunt of an unbalanced insurance market servicing northern Australia, forcing them to take desperate measures like raising prices, cutting back staffing hours, or take their chances without insurance altogether.
The ACCC’S second insurance monitoring report revealed last December that the average for small business insurance (policies for building and contents insurance) premium for North Queensland was $3095, compared to $1930 in the rest of Australia.
North Western Australia recorded the highest change on previous year with an average premium of $6287, followed by the Northern Territory at $3670.
Looking at what the top 5 per cent of policyholders were paying, North Queensland forked out $5629, while the rest of Australia paid $3673, with North Western Australia again ranking the highest at $9924.
C Bar owner Allan Pike said his business insurance premiums had “gone through the roof”, more than doubling over the past five years from $14,000 to $36,000 two years ago.
“I think that North Queensland gets a raw deal, particularly with insurance companies, and you’re seeing that over a given time,” Mr Pike said.
“The insurance companies are super quick to take all your money but they don’t want to help you out and you see that with the people up north that got flooded … they’ve been taking their money for years and years.
“(In the) North Queensland market, we get taken advantage of there’s no question about it.”
With the assistance from a good broker, he was able to shop around to secure a better deal for his portfolio from new American entrants into the insurance market, bringing the C Bar’s bill down to $29,000 last year.
“If you get the right person and they do all the research for you, you can get some savings out of it,” he said.
He was aware of local businesses struggling with rising costs taking the risk of not insuring for certain things, like plant breakdowns.
“They’re cutting corners to continue to operate the business and that’s not sustainable … it’s not a good business model,” he said.
To help address the problems, Mr Pike called for a larg
er contribution from the state government into the reinsurance pool for cyclones and related flood damage, along with increased regulation of the insurance industry, particularly in northern Australia.
“I’d like to see the insurance companies come under reviews to keep them ac
countable for their actions … there’s got to be some higher authority,” he said.
“I don’t see it changing straight away, I think the insurance companies are too big.
“Someone’s got to oversee them and make sure that are doing the right thing and make sure they’re not gouging everybody and make sure that they’re helping people out.”