Insurance costs explode for Far North Queensland councils
THE sky-rocketing cost of insurance is draining record revenue out of Far Northern councils, forcing rates up and taking money away from other essentials.
Cairns Regional Council is the latest to renew its asset insurance, which has risen 13 per cent to $1.37 million this year on top of the 50 per cent increase last year after cyclone Yasi.
The council was not anticipating such a huge rise from its insurance company again this year, so $145,000 had to be found elsewhere in the Budget.
That kind of money could buy three wi-fi CCTV cameras for the region, a new backhoe for the council's works department, two months of security patrols in the CBD or 50 years worth of New Year's Eve fireworks at Port Douglas.
Some local mayors say the price hikes have to be endured as the insurance industry recovers from recent natural disasters.
But others believe a united front from beleaguered northern councils would put pressure on the Federal Government to bring reforms to the industry."Maybe it's time for the councils to come together on this issue and try to put more pressure on," Cairns Mayor Bob Manning said. "We look at maybe taking a united front on this and getting on the front foot."
Cassowary Coast Regional Council recently saw its insurance premium double to $1.18 million in only two years, directly adding 1 per cent to the area's rate rise this year.
Tablelands Regional Council's insurance has tripled from $273,000 to $900,741 since 2009-10.
Despite paying brokers $36,000 to find the best deal, the Cairns council was only offered a policy from one insurance company this year.
All up, the council pays $2.2 million a year for insurance policies to cover its buildings and cars, public liabilities, industrial special risks and professional indemnity. "It is a concern, and not just for us. It's a concern for the ratepayers because the average Mr and Mrs Citizen out there are also being hit hard," Cr Manning said.
The Local Government Association of Queensland offers councils certain types of cheap insurance through its company, Local Government Mutual, but says it can't bring any relief in the costly property or vehicle insurance markets.
Tablelands Regional Council is currently auditing its assets and the amount each one is insured for to identify possible savings.
"Insurance has a big impact on our rates and also the money we have left to spend. Insurance is where a lot of our money is going," Mayor Rosa Lee Long said.
Cassowary Coast Mayor Bill Shannon said there was no simple solution to the price rises and insurance companies were within their rights to recoup their costs after a natural disaster such as cyclone Yasi.
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Damage: The effects of natural disasters have pushed up insurance costs in Far North Queensland.