THE owners of a historic guesthouse at Cooktown are being forced to operate the business without insurance after spending a year unsuccessfully searching for reasonably priced cover.

While the Hillcrest Guest House is covered for public liability, there's no insurance for fire, cyclone and other damage for the property which has a replacement value of $850,000.

Owner Katrina Wright said she was now involved in two last-ditch attempts with brokers.

One was for a $15,000 premium with a cyclone excess of $50,000 and the other was $13,000 but required a letter from a builder stating it was built to current cyclone standards.

The business has been without insurance since January last year after the initial premium was $37,800, later reduced to $16,000 but required proof of the building's cyclone rating.

Mrs Wright said more than 13 insurers had been approached and it was "impossible" to make the guesthouse meet the latest cyclone standards.

"It would have to be rebuilt. The Hillcrest was built in 1880 and is primarily made of timber so they are rejecting it on those grounds as well as the postcode," she said.

"I have replaced the roofing iron ($22,000), secured loose sheeting by replacing three walls ($12,000), I have put in 56 new cyclone-standard windows, I have new smoke alarms hard wired, I have fire safety doors. I've done everything to code without pulling down the building.

"In all my years of business I have never had such a head-banging time.

"We're self-insured at the moment. We are fortunate we don't have a mortgage.

"We have never had a claim (in seven years) and there is no reason why we should not get insurance. We've never defaulted on premiums."

Margaret Shawof Airline Beach, who is campaigning on strata title insurance, has challenged the Insurance Council of Australia to provide quotes for the property.

"Since the Insurance Council of Australia says we don't have a problem in north Queensland, and we don't have market failure, then surely the council can come up with a couple of quotes for the property," she said.

A council spokesman said the cost of natural disasters had had a significant impact on premiums as companies adjusted their pricing to take account of individual risk levels, with sharper increases in areas that had a history of natural disasters or exposure to future events.

"Consumers should shop around for the best policy that suits their circumstances," he said.

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