Insurer slashes flood premiums

Insurer slashes flood premiums

Insurer slashes flood premiums Suncorp has slashed home building premiums in towns which were protecting their communities from natural disasters.

Residents in south-west Queensland town of St George would receive a 15% premium reduction upon their next renewal, following the opening of a new levee today built to protect the town. The change takes effect on 10 April.

Similar repricing will occur in Charleville, which recently completed a new levee, and other mitigation work including house raising and water diversions. Customers of the Suncorp Personal Insurance brands, which includes Suncorp Insurance and AAMI, in Charleville would have faced average home insurance premiums of more than $3000 without any flood mitigation being undertaken. The average home policy now costs approximately $990.

In the Queensland town of Roma, in which a new levee is currently under construction, it is estimated that a typical $300,000 home will see the cost of a home and contents policy drop by approximately 30%.

 “Suncorp has long promised that if councils and governments invest in flood mitigation that reduces the risks of natural disasters to properties, we will come to the table and reduce the cost of premiums,” said Suncorp Personal Insurance CEO Mark Milliner. “Risk reduction is the best way to make insurance more affordable, particularly for people living in communities exposed to disaster.”

NIBA CEO Dallas Booth has expressed delight at the fact that the Roma levee is almost complete, and called for tenders for further flood mitigation. He is also confident insurers would respond to reductions in risk by reviewing their premiums where appropriate.

“We need to remember that storms and flooding from ex-tropical Cyclone Oswald caused almost $1bn in insured damage at the beginning of last year, capping off several years of major natural disasters in Queensland which had a significant impact on insurers and the cost of their reinsurance.

“The role of insurance brokers is to represent policyholders, not insurers, and brokers in Queensland will continue to work hard to get the most cost effective cover for their clients,” Booth said.
 
 
 
 
 
3 Comments
  • Peter Brown 14/03/2014 9:55:23 AM
    Interesting - Wagga Wagga has had levies protecting the city CBD since the 1960's and no flooding has occurred in the CBD since. A check of the river height records since 1844 shows that not one of the 77 high rivers recorded since then [170 years] would have exceeded the height of the current levee yet premiums have been hiked by all broker insurers over the past 2 years, simply because the local council has updated their current flood map which has resulted in a downgrading of the current levee's efficiency from a 1 in 100 year event to something like a 1 in 60 years event despite its history of saving the city! This is the information insurers are using to justify permium increases.
    We have a target on the office wall with a sign underneath which says - "Bang head here"!!!!!
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  • Scott 14/03/2014 12:09:54 PM
    I've heard similar things Peter. About 3 months back we had a spate of new customers trying to come to us from the Hawksbury river region. The local council had recently changed their flood mapping, and suddenly home insurance costs went from $2~3,000 to $23,000!
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  • William 17/03/2014 8:59:01 AM
    to echo Peter's comments - Wee Waa in NSW 2388 is protected by a levee and has not had flood inundation since constructed - do a dummy quote and check the costing
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