The Real Estate Institute of Queensland (REIQ) is taking a stand on behalf of Queensland homeowners affected by natural disasters. They are urging both the Federal and State Government to introduce programs that could control the soaring insurance premiums, ensuring that the cost of protecting homes against natural catastrophes is within reach for all residents of Queensland.
Recent cyclones and flooding events, particularly in the state’s far north, have raised concerns that insurance costs might skyrocket out of reach. REIQ CEO Antonia Mercorella emphasized the urgency for action by pointing out the staggering insurance prices that far north Queenslanders are facing. “Home and contents insurance premiums in north Queensland are on average $2,918 per annum, which is 64% higher than southerners,” expressed Ms Mercorella.
She also highlighted the challenge faced by those residing in Strata units, as “higher value Strata insurance is three times higher than the rest of the country.” The geographic disparity can lead to an even wider gap in prices, which not only hinders prospective buyers but also dampens the prospects for new housing constructions.
Acknowledging the Federal Reinsurance Pool’s initiation on 1 July—a $10 billion Commonwealth Guarantee aimed to alleviate risks for insurers and potentially reduce premiums—Ms Mercorella criticised the slow response from insurers to lower premiums in the Far North Queensland (FNQ). She pointed out a significant gap in the scheme, “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.”
With Queensland being no stranger to a wide range of natural disasters, from fires to floods, the REIQ advocates for a model similar to New Zealand’s approach. “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,” Ms Mercorella suggested as a viable alternative.
In addition to this, there is a call for the prioritisation of disaster-mitigating infrastructure in a bid to decrease insurance costs, as well as addressing the productivity loss and small business impact in these essential areas of the Queensland economy.
Ms Mercorella ended with a direct appeal to the state’s financial capabilities in providing a solution, “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.”