Cyclone Jasper highlights number of households priced out of insurance

With insurers now on the ground completing damage assessments there are many who have been hit hard after making the call to ditch home insurance as the cost of living skyrockets.

Cyclone Jasper and its once in a lifetime deluge has highlighted how more and more Far North Queenslanders are having to sacrifice home insurance as the cost of living skyrockets.

Katie Britt, a single mother, has lived in Holloways Beach with her children for over 15 years.

She has seen flooding come and go but she and most other beaches residents never thought they would see an event like they experienced in the wake of Cyclone Jasper.

“I never in a million years thought it could get like that,” she said.

“We have had water over the roads or up to people’s yards but it just kept rising and rising.”

Ms Britt had previously had her home insured but said that as a single mum it was just a cost she and her family could not continue to afford.

“There was just no way I could afford $5000 a year so I kept looking into and putting it off,” Ms Britt said.

Katie Britt and her stepson Jacob Pearson stand in front of her Halloways Beach home which was flooded during Cyclone Jasper's deluge. Photo: Dylan Nicholson

While Ms Britt said they fared better than others in Holloways Beach they were still assessing all the damage the flood caused to their split level home.

“The lower level and the unit out the back had a lot of water come through them and enough has come through onto the upper level to damage furniture and cabinets,” she said.

“What I am most concerned about is what is happening under the house. It is all still wet under the floorboards and I’m concerned about what that will mean going forward.”

Last week Queensland MP Bob Katter lashed the Australian Securities and Investments Commission and the federal government over the higher price of insurance in Far North Queensland.

Ree Sanders and daughters lost everything in their Holloways Beach home due to extensive flooding following cyclone Jasper. A GoFundMe page has been created to help them rebuild. Picture: Supplied.

Mr Katter said about one in four houses in North Queensland were not insured due to the prohibitive cost of exorbitant insurance prices in comparison to the rest of the country.

“The cyclone has hit, the flooding has taken place and they’ve got no insurance,” he said.

“That in itself is a disaster, but why was there no insurance?

“Allianz said ‘if you give us a reinsurance pool, then we will give you the same price as the rest of Australia’.”

Mr Katter said the reinsurance pool just “didn’t work” and there was no mechanism to force insurers to pass on the benefit of having a multi-billion dollar reinsurance safety net.

In 2022 the Australian government introduced the reinsurance pool which would be used to effectively cover cyclone damage risk, and have the government on a not-for-profit basis establish its pool from which insurers can offset part of their risk and pass on the difference to the customer.

A house Oleander St in Holloways Beach has been largely destroyed by a fast moving torrent of water. on Picture: Peter Carruthers

However, the implementation of the pool and the continual process of getting insurers on board has meant that savings are yet to be seen at the coal face for the consumer.

Minister for Financial Services Stephen Jones said the pool was not a “silver bullet, but it will provide some reduction in the cost for households in their insurance premiums.”

Mr Jones said the government and the Australian Competition and Consumer Commission would be monitoring prices to ensure insurers would pass on any savings.

“The clear understanding that we have with the insurers then needs to be passed through of any savings that they make through the reinsurance pool,” he said.

“And that’s what we’ll be looking at very closely.”

Originally published as Cyclone Jasper highlights number of households priced out of insurance