Damage from Cyclone Imogen. Picture: Kyra Hill
Damage from Cyclone Imogen. Picture: Kyra Hill

Insurance ‘unaffordable’ for most regional CQ homeowners

A three-year investigation into insurance premiums revealed that owners west of Rockhampton, deprived of competitive options, are opting out.

The Australian Competition and Consumer Commission's November report said cities along the Queensland coast, including Rockhampton and Mackay, have higher rates of home insurance ($1600-$3160 in 2016-2017) than the state average.

The rates of non-insurance in such centres generally ranged between 10-20 per cent.

However, rates of non-insurance in smaller regional towns soared to 80-95 per cent.

With average premiums between $1000 and $1250, these towns comprise smaller numbers of property owners (fewer than 500) who work in the mining and agricultural industries.

Over 95 per cent of those interviewed attributed their decision to cost (52 per cent said they couldn't afford it and 45 per cent said they couldn't justify the cost.)

 

 

 

ACCC comparison of non-insurance around Qld
ACCC comparison of non-insurance around Qld

 

 

Several so-called challenger brands do not supply insurance at all in the northern half of Australia which encounters "extreme and destructive" weather events.

The cost of rebuilding in the nation's north, after cyclones, storms and fires, amounted to $5 billion or 12 per cent the national total (for only 5 per cent of policy holders).

The ACCC report followed a series of public forum including one in Rockhampton.

The report concluded there were "mixed views" about the merit of considering insurance affordability when it came to land use planning.

However, it said "IAG (insurer) has provided advice in response to requests relating to specific proposals, such as Rockhampton flood levees and various flood mitigation projects.

"The advice provided generally involves providing guidance on reductions in annual average losses to properties."

The report also said premium planning was based on historical data and does not take into account the future impact of climate change.

New northern Queensland customers during the 2018-2019 financial year paid a whopping $369 average more than renewing customers.

The ACCC has recommended the Queensland government abolish stamp duties on home and content insurance, and consider direct subsidies.

"Direct subsidies have the greatest potential to work in a targeted way to relieve some of the acute affordability and cost of living pressures facing consumers in higher risk areas," it said.



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