Queensland MP George Christensen has supported linking insurance licensing with an obligation to provide cover in northern Australia, after continuing to hear complaints about lack of availability and soaring premiums.
“We are hearing that, in some cases, no Australian insurer is currently willing to offer new insurance policies to strata title apartments or commercial hotels in North Queensland,” he told the House of Representatives.
“In fact, in many cases, the only insurer willing to offer any coverage is Lloyd’s of London, and usually at unaffordable premiums. In some cases, there is no insurer willing to offer a policy at any price.”
Mr Christensen, a Liberal National Party member who has been a vocal critic of insurers, represents the Dawson electorate, which includes the Proserpine and Airlie Beach areas hit by Cyclone Debbie two years ago.
The Australian Competition and Consumer Commission is currently inquiring into insurance issues in the north and recently called for submissions on its latest update.
Mr Christensen says a crisis point has been reached and he supports a Greater Whitsunday Alliance proposal that would require insurers to have a mandated percentage of premiums and policies in northern Australia. The requirement would be linked to insurance licences.
“This would push insurers back into the market and provide competition, which would then lead to affordability,” he said.
“We can work with insurers to set the targets and ensure that they bring competitive insurance policy pricing back into these areas.”
The Insurance Council of Australia (ICA) is promoting measures that would improve mitigation and resilience.
“The ICA believes government intervention that would distort a properly functioning insurance market is not necessary,” spokesman Campbell Fuller told insuranceNEWS.com.au today.
“Insurance is readily and competitively available in northern Australia and is risk-rated.”
Older buildings in high-risk areas that may have poor resilience to extreme weather are typically offered higher premiums compared to newer better-built structures, while properties mainly used for short-term holiday rentals typically pay more compared to owner-occupied premises.
ICA continues to work with state and federal governments on regulations relating to strata insurance, Mr Fuller says.
Mr Christensen told Parliament that Airlie Apartments had received a Lloyd’s quote for about $250,000, a 557% increase on their last policy, while a body corporate administrator on Hamilton Island had being quoted $200,000 for a 15-apartment complex with a named cyclone excess of $100,000.
“It doesn’t stop at hotels and strata titles either. Other households are also being severely affected by increasing premiums in the north,” he said.
Mr Christensen also highlighted a Mackay couple who have had no claims, flood or cyclone damage for the past five years, but have seen their premium jump 22.5% compared with last year.
Published by Insurance News