Community
20 January, 2024
Call for cheaper premiums
THE Real Estate Institute of Queensland (REIQ) is calling on both federal and state governments to better protect homes against natural disasters with programs that will ensure insurance premiums are manageable for all Queenslanders.
Following a series of natural disasters across the state, the REIQ fears that insurance premiums will become unaffordable for more Queensland homeowners.
REIQ chief executive officer Antonia Mercorella said the cyclone and flooding event in Far North Queensland had highlighted the need for an expedited insurance pool in Queensland.
“Home and contents insurance premiums in north Queensland are on average $2918 per annum, which is 64 per cent higher than southerners,” she said.
“Further, in North Queensland, higher value strata (unit) insurance is three times higher than the rest of the country – depending on the location of the property there could be an even bigger disparity.
“The high insurance premiums are, not only prohibitive to some buyers, they also act as a disincentive for construction of new dwellings.
“The Federal Reinsurance Pool commenced July 1 – a $10bn Commonwealth Guarantee designed to lower the risk for insurers and likely drop premiums accordingly.
“However, insurers have been slow to act with premium reductions in FNQ.
“It does little to mitigate insurer risk when the scheme includes a 48-hour cessation date after the event, meaning damage which occurs afterward is not covered for insurers. This needs to be revised to ensure it actually achieves what it sets out to do.”
Ms Mercorella said with a range of natural disasters across Queensland from fires to floods it was time for the Queensland Government to look at all options to make insurance affordable again. “The REIQ calls on the Queensland Government to commence a program similar to that seen in New Zealand where a small percentage of all home insurance policies is set aside in an investment fund, allowing quick access for consumers in the case of a natural disaster,” she said.
“Further, the state government needs to prioritise natural disaster mitigating infrastructure to aid in bringing down the cost of insurance for residents of these regions that contribute so much to the Queensland economy.
“The lost productivity and impact to small business needs to be addressed to reflect a modern economy.
“As the Queensland Treasurer has indicated, the state has a strong balance sheet, so now is the time to utilise that strength to provide Queenslanders with the ability to insure their properties in an affordable manner no matter their location.”
