Social cost of pricey premiums to undergo JCU probe

Social cost of pricey premiums to undergo JCU probe | Insurance Business

Social cost of pricey premiums to undergo JCU probe
A new survey is being conducted in order to find out how the high cost of insurance in the Far North is impacting residents.

James Cook University has commenced a survey of residents on Cairns’ northern beaches as it aims to identify the multiple risks the residents face and how they can mitigate these through insurance, The Cairns Post reported.

Project leader and sociologist Dr Nick Osbaldiston said the survey would uncover how the residents’ ability to insure their properties is being affected by rising insurance costs.

According to last year’s federal government report into insurance in northern Australia, the cost of claims in North Queensland was five times more than that in Brisbane, Sydney, or Melbourne.

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“One of the interesting narratives that came out of the insurance report last year by the Treasury was that insurance companies are saying they need to build up that pool of money to alleviate any future threats that may come from a massive cyclone in a place like Cairns,” Osbaldiston told The Cairns Post.

“So they’re kind of suggesting that’s why the insurance premiums are so high here.

“But I don’t know whether that has been communicated effectively to the community at all. One of the questions we want to ask is, if people feel like we’re getting a raw deal.”

The survey also seeks to find out what risks the locals understand they face, what newcomers to the area know about these risks and insurance issues, and how much the residents trust the insurance industry, the report said.

“One of the things we really want to find out is who is not insuring,” Osbaldiston said.

“We talk a lot about homeowners insuring, but one of the things I always wonder about – and this is one of the reasons we designed the project – was what are people doing when they come into the area when they come from out of town, and suffer a 300% rate rise?”

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