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There has been a push by the Real Estate Institute of Queensland (REIQ) for the federal and state government to roll out programs that will better protect homes against natural disasters for those living in Queensland.
“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,” stated REIQ CEO Antonia Mercorella.
The request comes after the recent Cyclone Jasper event in Far North Queensland in December 2023.
Ms Mercorella noted that while the Federal Reinsurance Pool commenced on 1 July 2023, the $10 billion Commonwealth guarantee that was designed to lower risk for insurers and drop premiums accordingly has seen insurers “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.”
That cut-off time was put in place at 12am Saturday, despite the area experiencing more damage due to flooding after this time period.
The CEO reiterated: “This needs to be revised to ensure it actually achieves what it sets out to do.”
“Home and contents insurance premiums in North Queensland are on average $2,918 per annum, which is 64 per cent higher than southerners,” Ms Mercorella stated.
The aim of this push is to ensure insurance premiums are both accessible and manageable for all Queenslanders, given the state is prone to natural disasters. According to the Queensland government, more than 100 disaster events have occurred across the state since 2011, including storms, fires, cyclones, storm tides and floods.
REIQ has also pointed out that the high premiums also act as a disincentive for construction of new dwellings.
According to the Australian Competition and Consumer Commission (ACCC), average strata premiums for insurance in North Queensland in 2022–23 were $9,615 in comparison to the rest of Australia at $6,181.
Beyond this, Ms Mercorella said: “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.”
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