EVER increasing insurance premiums of people living in Central and Northern Queensland has come under the microscope of the Federal Government.
Federal Member for Capricornia Michelle Landry has welcomed action from the Coalition Government to help investigate and reduce the high cost of insurance to Central Queensland households, small business and farmers.
In a key announcement today, the Federal Government has committed to look at several steps designed to relieve the burden of escalating insurance premiums for people living in Northern Australia.
Ms Landry said Cyclone Marcia was a prime example of where insurance companies expected people in Capricornia to pay 'ridiculous' insurance costs.
STORIES ABOUT INSURANCE AFTER MARCIA:
"The cost of insurance is one the biggest issues residents and small businesses have been raising with me," Ms Landry said.
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"Since taking office I have been working very hard with people like Warren Entsch (Chairman of the parliamentary committee on the development of Northern Australia) to look at what can be done to lower insurance premiums.
"I want to bring parity to overpriced insurance premiums in Capricornia, compared to other parts of Australia," Ms Landry said, "we shouldn't be forced to pay more than other similar places just because we live north," she said.
"The cost of insurance for small business, households and farmers are enormous and many are struggling to even afford it. This results in people being unable to pay their insurance bill, putting them at risk from hazardous incidents like fire, floods or cyclones."
Ms Landry said today's announcement by Assistant Treasurer Josh Frydenberg and Warren Entsch will see the formation of a high-level taskforce to look at introducing one of two things:
• Either: A government backed reinsurance pool for catastrophes like cyclones and other natural disasters that would mean insurance companies would have no reason not to reduce their premiums.
The pool would act in the same way as the current Federal Government backed terrorism insurance pool that underwrites certain risks from terrorism related incidents.
• Or: The second option is to push for more mutual style insurance groups where the insurance group is effectively owned by policy holders. An example of this might be an RACQ type arrangement.
The Federal Government today announced it is spending $2 million to put together a high level taskforce to study these two options in a serious step forward to take out any impediments or excuses as to why insurance companies can't then offer more affordable premiums for people living above the Tropic of Capricorn, Ms Landry said.
"Effectively, it would take uncertainty out of the market place with regard to natural disasters. Insurance companies could no longer bill this as a fluctuating factor into their premiums, therefore limiting costs to consumers.
"It is hoped that the study will deliver important change in the insurance market and comes about because there is simply no affordable insurance cover in many parts of Northern Australia
"Our aim is to bring parity to overpriced insurance premiums in Capricornia and North Queensland, compared to other parts of Australia," Ms Landry said.