Insurance hikes probed
CONSUMER watchdog Choice is investigating the increasing cost of home and contents insurance premiums, including the impact on the Far North.Details of the probe will be published next month with the organisation remaining tight-lipped about the findings. The Far North has been one of the hardest-hit regions for large increases in premiums.
Choice spokeswoman Ingrid Just said the watchdog had spoken to consumers and industry insiders.
"We have been keeping a close eye on the premium increases since the major weather events of the last few years and our recent work looks at whether the premium increases are justified," she said.
Airlie Beach-based Margaret Shaw, who is gathering a national petition to get government intervention into the rising costs with more than 4500 signatures, said Choice believed North Queensland was "a special case, an area where the widespread 'market failure' appears to be particularly acute."
"Their view is that the insurance industry is failing Australians and using the flood and disaster issue as a pretext to price many consumers out of the market and/or shore up profit margins," she said.
Ms Shaw said she believed that Choice might undertake a related investigation into the Queensland strata property issues.
Member for Leichhardt Warren Entsch, who has been leading the fight to reduce soaring insurance costs, is a member of an Opposition committee preparing policy changes to take to the next federal election.
He said he welcomed Choice's involvement and was seeking legislative changes to ensure compulsory strata title insurance was based on the market value, not the more expensive replacement value of units and apartments.
Springfield body corporate chairman Ross Grant said he agreed with the market value push.
He said their 12 units at Manoora had been revalued, doubling to $4.2 million. "We now expect our premium to double from $5500 to at least $11,000," Mr Grant said.
The Insurance Council of Australia is funding James Cook University research in a bid to drive down spiralling insurance costs.
The Federal Government held public hearings last year and the federal actuary was instructed to investigate. He found that under-pricing by insurance companies in the past, as well as recent natural disasters and the cost of reinsurance, had resulted in the higher premiums.
sBut the federal governemnt has taken no further action. The state government has agreed to a 12-month moratorium on stamp duty charged on strata title insurance in north Queensland.
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