The Local Government Association of Queensland, the peak body representing the state’s 77 councils, is urging the Federal Government to establish a national reinsurance pool to help reduce the cost of insurance premiums in North Queensland and across northern Australia.
The Association called for this measure in its Federal Budget submission in support of member councils like Townsville City Council and the Whitsunday Regional Council and their communities, who have been vocal for some time in calling for change.
A precedent already exists from when the former Howard Government established the terrorism reinsurance scheme and the Association urges the Commonwealth to follow that precedent and establish a similar arrangement for insurance in northern Australia.
LGAQ President and Sunshine Coast Council Mayor Mark Jamieson said figures contained in the Australian Competition and Consumer Commission’s inquiry into insurance in Northern Australia, released in December, were stark.
“The ACCC found insurance premiums had risen by up to 178% in Northern Australian over the last decade, compared to 52% elsewhere,” Mayor Jamieson said.
“More than 62,000 properties in North Queensland are currently uninsured, with more than 95% of those uninsured property owners citing cost as a reason, the ACCC found.
“This is just simply unacceptable in a state as highly vulnerable to natural disasters as Queensland.
“Our member councils want a reinsurance pool established to help reduce those costs so their communities are not unfairly burdened, and we support their call.”
Townsville Mayor Jenny Hill said, “The ACCC took three years to complete its investigation into insurance in Northern Australia and over that time the situation has further deteriorated.
“Homeowners, renters, businesses, body corporates – the prohibitive cost and, in some cases, lack of availability of insurance, is seriously impacting communities.
“A reinsurance pool already exists through the Australian Reinsurance Pool Corporation, set up by the Howard Government in 2003 to address a previous instance of market failure.
“The insurance market in Northern Australia has clearly failed and it’s time for a national reinsurance pool to help reduce the cost of insurance premiums.”
Whitsunday Regional Council Mayor Andrew Willcox said, “It is not just homeowners who are struggling with high premiums, but also our tourism accommodation and marine operators face similar prohibitive expenses.”
He added, “We are advocating for the Federal Government to underwrite cyclone insurance for North Queensland to bring our premiums in line with the rest of Australia.”