Industry body defends high premiums in the Far North

Industry body defends high premiums in the Far North

Industry body defends high premiums in the Far North

The Insurance Council of Australia has denied the alleged price gouging of home insurance premiums in the Far North, citing the risk of cyclones as the cause of high premiums.

The industry body said the allegations were repeatedly disproved by three independent reports, which investigated the premiums and concluded that insurers were pricing fairly, The Cairns Post reported.

“Despite this, the market remains highly competitive on price and on policy features,” said Campbell Fuller, ICA’s GM for communications and media.

Not everyone agrees, however.

Barron River MP Craig Crawford, who was mailed a $3,500 quote, said premiums were “absolutely highway robbery,” the report said.

Want the latest insurance industry news first? Sign up for our completely free newsletter service now.

“The reality is we are paying ridiculous amounts for insurance,” he said. “They have got us stuck in a hard place.”

Crawford said he would discuss with the departmental staff the feasibility of resurrecting a state government insurance organisation, which was sold off in 1996.

ICA said North Queensland residents are six times more likely to lodge a claim than anywhere else in the country, while insurers pocket $1 for every $1.40 in claims, the report said.

A 2016 report cited mitigating premiums, such as cyclone-proofing households, as the key recommendation to lower consumer costs.

ICA will visit the Far North in the coming weeks to conduct forums on cyclone mitigation.

Fuller said mitigation would safeguard communities and properties for generations.

“The cost of mitigation is repaid tenfold or more over the life of the infrastructure,” he remarked.


Related stories:
http://www.insurancebusinessmag.com/au/news/breaking-news/breaking-news-industry-body-warns-of-potentially-severe-disaster-season-58196.aspx
http://www.insurancebusinessmag.com/au/news/breaking-news/bom-extreme-weather-events-mar-2016-58439.aspx