Homeowner anger as premiums soar amid cost of living crisis

Sean McKay was infuriated when his insurer jacked up his annual landlord’s insurance premium by nearly 20 per cent this year, and he’s not the only one.

Investor Sean McKay was infuriated when his insurer jacked up his annual landlord’s insurance premium by nearly 20 per cent this year.

He had not made a claim on his investment property, in the north Brisbane suburb of McDowall, nor was it in a flood zone.

But still, his premium was increasing from $2,789 to $3,275.

“I just think it’s a bit rich,” Mr McKay said, noting his mates had also had copped premium increases – some as much as $900 – despite not being impacted by floods.

“If they didn’t flood then why increase their premiums when it was shown that when the flood was on, they didn’t flood.

“It’s just like crazy. And why should everyone else have to pay? The insurance companies are in a gambling industry. They’re gambling they’re going to get all the money and not have to pay. Sometimes they have to pay.”

Sean McKay and his daughter Maddy McKay are furious about increasing home insurance premium hikes.

Mr McKay, 61, said councils should also take responsibility for approving properties in disaster prone areas or greenlighting developments that increased the risk of flooding in an area.

“It’s happening everywhere, they’re just building more houses without improving the infrastructure,” he said. “And it gives insurance companies the opportunity to say, oh it’s flooding now.”

REA Group senior economist Paul Ryan said homeowners and buyers were increasingly concerned by rising insurance costs, which for some prevented them from breaking into the market.

“In some regions insurance costs have become unaffordable or homes uninsurable, which can limit the ability to obtain a mortgage,” he said.

“We are seeing this influence buyers, who are paying a lot more attention to climate risks as part of their home searches.”

KPMG insurance expert Scott Guse said insurers were becoming increasingly sophisticated by calculating premiums using government modelling, flood and fire maps.

“Even though you might be next door to your neighbour, they will price each house totally differently based on the characteristics of each house,” he said.