Cairns home insurance discount hopes after $10b federal government announcement
A Cairns property owner whose premiums have catapulted from $8000 to $43,000 has reacted to Prime Minister Scott Morrison’s $10 billion insurance announcement.
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CAUTIOUS optimism has hit the Far North as property owners hope a $10 billion insurance shake-up will finally reverse years of crippling premium hikes.
Prime Minister Scott Morrison’s visit to Cairns to spruik a $10 billion guarantee for the Australian Reinsurance Pool Corporation to cover cyclone damage has raised expectations of a dramatic drop in premium prices.
However, the absence of fine details about what sort of reductions can be expected – and when – has residents wary about celebrating too early.
Clifton Sands Holiday Apartments owner Linda St Quintin has watched her premiums catapult from $8000 a year in 2013 to $43,000 this year.
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She said competition had also dropped out of the market with only one company, Sure Insurance, willing to cover the Clifton Beach complex.
“It’s take it or leave it. You can’t justify that,” she said.
“Nothing has changed – we’ve had no cyclone and the building has stood for nearly 40 years with no claim.”
Ms St Quintin said she spoke to a Gold Coast mortgage broker three months ago who said insuring her building would cost $8500 in the southern coastal city.
“That’s where it should be up here,” she said.
“We’re not the ones getting hail damage, flood damage, fire damage, and yet we are paying for it.
“I’m cautious. It remains to see how much assistance strata is going to get.”
Mr Morrison has announced a $40 million three-year pilot program to subsidise the cost of cyclone risk mitigation works for strata title properties across North Queensland, on top of the reinsurance pool plan.
City View resident Steve Moon was thrilled to learn of the government’s latest property insurance mechanism.
“It’s well and truly overdue,” he said.
“It’s obviously going to lower premiums, there’s no doubt about that, but I think it will also create a lot more competition between insurance companies.
“We will probably end up with new insurance companies coming into the market because they can see a bit of a windfall here.”
Mr Moon said his premiums had increased by 110 per cent in recent years.
“It’s absurd, especially when we live in a place that’s not flood-prone,” he said.
The effect of slashing premiums will be keenly felt by big business operators who have been forced to subtract ever larger sums from their profit margins each year.
Cazalys Group general manager Jason Wale said only two companies were available to insure the organisation’s seven sporting precincts, multiple social clubs and other interests.
“Any less and there would be zero competition,” he said.
“We really needed to get to a point where there was market failure so something had to be done.
“Adding competition is good for everyone, gives us options and helps keep everyone honest.”
Originally published as Cairns home insurance discount hopes after $10b federal government announcement
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