Federal Government established reinsurance pool for cheaper home and business insurance for northern Australians
The federal government has established a reinsurance pool aimed at reducing costs over a 10-year span.
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Mackay Isaac Whitsunday residents will have access to more affordable home and business insurance, backed by a $10bn guarantee.
The federal government has established a reinsurance pool to cover cyclone and related flood damage in Northern Australia from July 1, 2022.
This move is aimed at reducing insurance premiums across Northern Australian by more than $1.5bn over 10 years with more than 500,000 households, strata and small businesses eligible to access the reinsurance pool.
Prime Minister Scott Morrison said the plan showed the government was listening to Northern Australians.
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"We believe in the future of Northern Australia. This means we need to take further action to boost the resilience for Australians to live and work in Northern Australia," Mr Morrison said.
"Homeowners and businesses have been faced with crippling insurance costs, and in some cases, can't get insurance at all. It's not OK, and we're going to change that.
"Our plan will give more Australians in cyclone-prone areas access to affordable insurance."
This announcement comes five months after the Australian Competition and Consumer Commission's final report following a three-year probe into high insurance costs for Northern Australians was made public.
The report, handed down in January 2021, revealed Northern Australians were being slugged with premiums twice the national average.
At the time Dawson MP George Christensen said a reinsurance pool, collected through a nationwide levy, would help offset insurance companies' costs and lower premiums in the north.
"This measure by the Morrison Liberal National Government will go a long way towards addressing the insurance affordability crisis in North Queensland and is very welcome," Mr Christensen said.
Disaster and Emergency Management opposition minister Murray Watt hit back saying the government had promised to fix the north's insurance crisis for eight years.
"Now they promise it again, but not until after another election," Mr Watt said.
"The Prime Minister Needs to tell people in the north how much premiums will fall and when. Otherwise this is just more spin and marketing to get him through an election."
Treasurer Josh Frydenberg said a Treasury-led Taskforce would develop the final design of the reinsurance pool in close consultation with industry.
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"More affordable insurance means peace-of-mind for hundreds of thousands of Australians across Northern Australia, knowing that their economic livelihoods are protected," Mr Frydenberg said.
The government has also committed $40m to the North Queensland Strata Title Resilience Pilot Program, to start in 2022, to specifically reduce insurance costs for strata properties.
The ACCC noted in 2018-19 the average strata premium was $6800 in North Queensland, twice the Australian average of $3300.
Strata residents have few options other than to pay this because strata properties are required to hold insurance under Queensland legislation.
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Originally published as Federal Government established reinsurance pool for cheaper home and business insurance for northern Australians
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