SEQ flood victim shocked at 500pc home insurance hike

A victim of two floods who doesn’t “even earn $60k a year” questions how she is supposed to pay a $30,000 increase in her home insurance premium.

Residents in disaster-prone areas are being charged as much as $30,000 more – a 500 per cent increase from the previous year – to renew their home insurance.

Leading consumer advocacy group Choice says it is seeing more homeowners priced out of being able to insure their properties.

Lynette Shephard, of Lawnton, who has lived in her home for 20 years, said her premium with ANZ increased from $5900 to $39,186.80.

Choice insurance expert Jodi Bird said that over the years he had seen huge increases from $5000 to $40,000, or even more.

“It does come through as a shock and anecdotally, it does seem to be occurring more and more lately,” Mr Bird said.

The Lawnton property of Lynette Shephard in the 2011 floods.

“From when we looked at it and when we look at the pricing data, it appears that what happens is that certain insurers just decide for whatever reason, they don’t want to be in that particular market any more.

“So it might be a market that’s prone to floods or cyclone or fire, then an insurer just goes we don’t want to be here any more.”

Mr Bird said insurers then jacked up the prices in order to exit the market.

“So it’s a subject that’s going to keep coming up and we can’t really turn a blind eye, we need to have a look for the solutions for it,” he said.

Mr Bird said the increases left some people uninsured.

“The most common one we’ll see is people in flood areas might then opt out of flood cover because they’re unable to afford that insurance,” he said.

“Which is obviously a huge risk if you’re in a flood-prone area. But if you can’t afford an extra 30 to 40 grand then what else are you going to do.”

Lynette Shephard’s insurance has unexpectedly has gone from $5900 to more than $39000 on her home in Lawnton, Brisbane. Picture: Lyndon Mechielsen/Courier Mail

Ms Shephard, whose home was previously hit by the 2011 and 2022 floods, said she was shocked when she saw how much her insurance had increased.

“I thought it was a joke; I thought there was a misprint,” she said.

“I rang them to find out and that’s when they said, ‘we’ve got new underwriters and this is what they deem your place you have to pay’,” she said.

“I’m like, ‘well, how can you justify that?.

“How am I supposed to live? I don’t even earn $60k a year – it’s just ridiculous.

“I said to them, ‘you can cancel the renewal because it won’t be happening’.”

Lynette Shephard at her property. Picture: Lyndon Mechielsen/Courier Mail

A spokeswoman for IAG, which has a general insurance partnership with ANZ, said a premium reflected a range of factors.

“While we always look to keep premium increases to a minimum for our customers, the key challenge in high-risk flood-prone areas is insurance affordability, as a customer’s premium will reflect our assessment of their property’s risk,” she said.

Ms Shephard said she tried to shop around but found it difficult because many areas did not offer flood cover.

The Lawnton property of Lynette Shephard in the 2011 floods.

An Insurance Council of Australia spokesman said the affordability and availability of insurance was the “No.1 concern” for the industry and called on the government to invest in more resilience measures to strengthen homes.

“Insurance prices risk, and as the frequency and intensity of extreme weather events worsens insurance affordability is becoming increasingly challenging, particularly for those in high-risk areas like flood zones,” he said.

“In addition to the impact of extreme weather events, insurance premium increases are being driven by inflation, particularly in the building industry, and the growing cost of reinsurance, which is insurance that insurers buy.”

A spokeswoman for Hollard Insurance, which has a partnership Insurance with Commonwealth Bank, said the likelihood of weather event and inflation had contributed to the overall increase in the cost of home insurance.

“Periodically, Hollard conducts reviews of properties across Australia where an area or a specific address has an increased risk from a natural disaster or catastrophic weather event,” she said.