Editor’s view: Unaffordable insurance premiums is a recipe for disaster
Insurance premiums are becoming unaffordable in parts of Queensland and the onus is on state and local governments as well as insurers to find a solution, writes The Editor.
Insurance premiums are becoming unaffordable in parts of Queensland and the onus is on state and local governments as well as insurers to find a solution.
As revealed today, Brisbane residents are being hit with insurance bills of up to $32,000 in some suburbs - a huge increase from the previous $3000 premium - despite only minor issues in the 2011 and 2022 floods.
Homeowners in regional Queensland are also being stung by exorbitant premiums.
It’s unsustainable, and will result in many homes being underinsured - or worse, not insured at all.
And in a state like Queensland, prone to wild weather events, that’s a recipe for disaster.
But it’s not all on the insurers.
Insurers have, for a long time, been calling for more flood mitigation strategies in both regional and metropolitan Queensland to reduce the impact of disasters.
In the Insurance Council of Australia’s (ICA) submission to the parliamentary inquiry into the response of insurers to the 2022 floods, it was noted that insurance provided financial protection against floods but it is “not a solution to flood risk”.
“The ICA has long advocated for policy solutions to reduce risk in Australia, including improved land use planning, better building stands, and investment in community mitigation infrastructure and household-level risk mitigation,” CEO Andrew Hall wrote.
“Action in the areas would both reduce the risk to individuals and communities (and in turn pressure on the insurance system) and reduce pressure on affordability over the longer term.”
In the lead-up to The Courier-Mail’s Bush Summit in 2023, Suncorp CEO Steve Johnston said flood levees in regional Queensland would also help put downward pressure on premiums.
All levels of government should take this advise on board.
But there needs to be a commitment by insurers to reduce premiums if these mitigation works are undertaken.
The mayors of Balonne and Murweh, where the towns are ringed by levee banks that have protected them for more than a decade, have complained that insurance costs keep soaring for their residents, despite the works they have undertaken,
It should be noted that when premiums do rise, the level of service offered by insurers must increase with it.
One in five Gold Coast residents affected by the Christmas Day mega storm for example are still in heated talks with insurers over their claims.
Insurers could also play their part in making it easier for homeowners to reduce their premiums, by being more transparent, about what’s driving up the cost, and giving them better avenues to adjust insurance policies.
Insurance is a huge cost on the family budget, but a necessary one, so there needs to be a conscious effort made to bring about change to ensure more households on’t find themselves underinsured in the event of a disaster.
The parliamentary inquiry has until October 18 to finalise its report.
No doubt many of these issues will be canvassed. And then it is on our leaders to work with insurers on a viable solution.
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