Queensland councils have reiterated their call for a national reinsurance pool and backed targeted disaster mitigation projects to reduce the prohibitive cost of insurance in North Queensland.
Responding to a Senate Select Committee report on the effectiveness of the Australian Government’s Northern Australia Agenda, the Local Government Association of Queensland (LGAQ) said the region had endured unreasonably high insurance costs for far too long.
The Australian Competition and Consumer Commission has previously reported that the average premium for combined home and contents insurance in northern Australia is almost double that for the rest of the nation and the average non-insurance rate for homes is estimated at about 20 per cent, compared to 11 per cent elsewhere.
LGAQ President and Sunshine Coast Council Mayor Mark Jamieson said affordable insurance coverage was an absolute necessity for councils, residents and businesses in North Queensland.
He welcomed the wide range of counter measures raised in the committee’s report, especially the focus on disaster mitigation, and hoped some of these would be recognised by the Federal Government in the May 11 Budget.
“On behalf of North Queensland councils and the communities they represent, we urge the Federal Government to act on this matter before the next disaster season comes around,” he said.
Mayor Jamieson thanked the Senate Select Committee for considering the LGAQ’s call for a reinsurance pool to be established similar to the terrorism reinsurance scheme introduced by the Federal Government in 2003.
He said the committee had heard submissions during its hearings of a clear insurance market failure in North Queensland.
“A national reinsurance pool, as well as targeted disaster mitigation projects, would help bring down premium costs so local residents and business owners can afford the sort of protection that those in other parts of the country take for granted,” Mayor Jamieson said.
“The Government must respond without delay and introduce measures that will effectively reduce those premiums to affordable levels.”
Townsville City Council Mayor Cr Jenny Hill thanked the Senate Select Committee for focusing on the insurance issue and hearing from locals at a public hearing in Townsville last month.
“North Queensland residents shouldn’t be punished because of where they live,” she said.
“We are Australia’s most disaster-impacted state and that’s why this issue deserves national focus.
“Home, contents and strata insurance products are the most expensive or difficult types of insurance to access.
“More than 61,200 North Queensland homes are uninsured, with over 95 per cent of uninsured people living in North Queensland citing cost as the major reason.
“There are instances of insurance companies advising current policyholders that their insurance would rise by 139 per cent after the floods of 2019 here in Townsville, or that strata insurance would not be available unless an excess of $500,000 was payable.
“That is a clear market failure of an essential service that needs government intervention,” she said.