Cyclone reinsurance pool: Sure Insurance wants no-disadvantage test applied

An insurance provider says the reinsurance pool could actually increase premiums as an arborist urges residents to stop chopping trees down to “self-insure”.

AN EXPERIENCED vegetation management expert believes Cairns is losing its tropical qualities as residents “self-insure” by unnecessarily chopping down healthy trees.

Advanced Vegetation Management director Mike Dowling wants to see insurance companies reward policy holders for taking out professional tree assessments which reveal the health condition of the plant, and indicate its risk potential during cyclones and storms.

Mr Dowling said it was a question insurance companies needed to ask and was no different to asking whether a car is parked in a locked garage or on the street, when assessing risk.

“I’ve heard some people are just self-insuring by chopping trees down, and some people are afraid they won’t get paid out if a tree on their property does damage,” Mr Dowling said.

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“But we’re saying you don’t have to go chopping everything down if you get a level-five arborist to assess the tree’s body language, internal health, the roots and use a number of tools to determine if it’s worth cutting down or not.

“And if you have that report to say your trees are OK, insurance companies need offer a discount.”

With over a decade of experience in the industry, and despite being in his commercial interests, Mr Dowling said cutting down a tree was always a last resort.

“The abundance of trees here really typifies our tropical environment and having trees can lead to a difference of 10 degrees cooler under the shade.

“Risk assessment in my view is going to take away the bad trees, and leave healthy trees for a lot longer,” he said.

The shady and cool Japanese Memorial garden on Grafton St has been touted as a perfect example of quality urban planning. Picture: Brendan Radke

Mr Dowling’s comments come as the long-awaited Cyclone and Flood Damage Reinsurance Pool Bill passed the Federal House of Representatives in February and was now before the Senate.

Queensland-based insurance company Sure Insurance spoke to the bill on Tuesday at the Senate Economics Legislation Committee hearing, insisting a no-disadvantage test be applied to the government’s reinsurance pool to ensure no existing policyholder was worse off under the pool.

“The pool requires mandatory insurer participation. We proposed that if an insurer for a particular property is able to charge less than the pool price then they ought be allowed to do so and retain the risk rather than using the pool,” managing director Bradley Heath said.

“Additionally insurers should also be prohibited from ever charging more than the pool price. Regrettably both of these safety nets have not been included in the pool design.

A potential fair solution is that insurers could use the pool for a policyholder if the pool is cheaper, otherwise, if the insurer is able to charge less than the pool price then the policyholder should get the benefit of this; the policyholder wins either way by obtaining the lowest available premium and the pool objectives are realised.”

Originally published as Cyclone reinsurance pool: Sure Insurance wants no-disadvantage test applied