‘Temporary insurance halt’ for SEQ amid $1bn disaster battering
Wild weather in parts of southeast Queensland has prompted insurance companies to stop issuing policies to new customers until the threat is over.
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Wild weather in parts of southeast Queensland has prompted insurance companies to stop issuing policies to new customers until the threat is over amid a near $1bn disaster battering.
Suncorp, AAMI and RACQ have confirmed in some areas of southern Queensland the threat of “imminent” natural disasters has prompted them to stop offering coverage to new customers.
Insurers have copped a battering this summer, with Suncorp on Monday revealing it received more than 500 claims for damage linked to ex-Tropical Cyclone Kirrily, with total natural hazard costs expected to top $568m for the first half of the financial year – compared to Suncorp’s full year allowance of $1.36bn for disaster costs.
The three big insurers said the move to temporarily halt issuing policies to new customers was common practice across the industry, and noted existing customers remained protected.
Suncorp and RACQ noted insurance was intended to assist people in unforeseen events and when a significant flood or cyclone warning was issued the event was no longer unforeseen.
“When a significant weather event is extremely likely or imminent, and therefore no longer unforeseen, insurers may put an embargo in place to stop accepting any new business given the elevated risk,” an RACQ spokeswoman said.
“There are exceptions for existing customers in certain circumstances such as when you are buying a home.
“We are constantly reviewing embargoed areas and aim to lift restrictions once the imminent threat has passed.”
Suncorp on Tuesday said it had temporary restrictions due to major flood alerts for some local creeks and rivers, but did not stipulate where.
Insurers use advice from meteorologists to determine when to issue policy embargoes.
Latest claim data from the Insurance Council of Australia revealed there had been 1430 claims, but no cost estimate, lodged in the wake of ex-Tropical Cyclone Kirrily.
The damage bill for ex-Tropical Cyclone Jasper and the Christmas and New Year storms has hit $743m in insured losses with more than 79,000 claims.
An Insurance Council of Australia spokeswoman said temporary embargoes were common.
“When a disaster is imminent insurers will place a temporary embargo until the threat of the disaster passes for the particular risk, for example a bushfire or flood,” she said.
“Some insurers do offer options to take out a policy with a waiting period for pending risks, whether that be a flood or a bushfire.”
Stefan Gassner, of Bray Park, said he had home insurance but didn’t have flood cover because it was too expensive following the 2022 floods.
“It was just too expensive when we tried to insure it was too much because they wanted $9000 a month for it,” he said.
“So we just decided because it’s downstairs and it’s not really built out with any sort of furnishings or anything like that, we didn’t think it was worth it.
“It’s more than the mortgage. It’s way more than the mortgage. Let’s just say that.”
Separately, Prime Minister Anthony Albanese backed more transparency in the government’s $10bn reinsurance scheme – which is under review.
“People who have insurance should get their payouts,” he said.
“People need to be looked after, I think that’s what Australians expect, and that’s what people in Queensland expect as well.”
Mr Albanese – announcing a $70m investment into a Townsville hydrogen hub, said Queensland’s summer of extreme natural disasters proved the importance of reducing emissions.
“The science told us that climate change would result in more extreme weather events and more intense extreme weather events and unfortunately, that’s what we’re seeing playing out and that’s why addressing climate change is so important,” he said.
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