#AceNewsReport – Mar.25: There’s a lot of old fixtures in here and they absorbed a lot of water and just disintegrated in a couple of days.”
Like many Australians, Joe couldn’t afford to take out flood insurance. Now he’s paying the price: ‘A month ago, after renting for years, Joe Wilkinson bought his dream home at North Haven on the New South Wales mid-north coast & its now been ruined by floodwater’ after we borrowed some money from parents and in-laws to get a deposit together and it was just about manageable, the price they were asking, without breaking the bank — and we finally settled a month and a half ago,” he told 7.30 …..After such a big purchase, Mr Wilkinson decided against paying $13,000 for flood insurance…..
Consumer watchdog the Australian Competition and Consumer Commission (ACCC) has had its eye on the affordability of insurance …
(ACCC) Report: 300 pages PDF
Posted 2h ago
The damage bill is now his to pay.
“It [flood insurance] was too expensive at the time,” he said.
“It just wasn’t feasible, and when you decide something like that, you don’t think a month down the line you’re going to be inundated with water.”
Affordability of flood insurance a major concern
Mr Wilkinson is not alone in his decision to forgo flood insurance.
According to Allianz, one of the nation’s biggest insurers, 95 per cent of its customers in New South Wales have decided not to take out flood cover.
It found in cyclone- and flood-prone areas of northern Australia, premiums had increased 178 per cent over the past 10 years. Among the recommendations was more investment to reduce the risk of disasters.
Andrew Hall from the Insurance Council of Australia said more mitigation work, such as building dams and levees, was key to reducing premiums.
“If we can invest more into the infrastructure that can mitigate against these kinds of challenges like floods and bushfires, we will see a significant drop in the cost of insurance in this country,” he told 7.30.
“Over the last three years, insurers have paid out around $7 billion in claims in natural disaster — and in the last calender year, insurers across the nation made only $35 million in profit.”
Emergency Management Minister David Littleproud said the government was committed to increasing funding for mitigation, but asked that insurers keep their promises in reducing premiums.
“We’re currently working with the states to roll out $260 million worth of mitigation works,” he said.
“We would expect there’d be transparency from insurance companies about how that would drive down premiums because their track record hasn’t been great in some parts of the country.”
‘The money I would spend on insurance could fix the house’
West of Sydney, Londonderry resident Greg Teale is another who opted not to take out flood insurance after being told it would cost $16,000 a year.
The bottom level of his home was inundated with floodwater. He’s also suffered about $70,000 in damages to his stock feed business.
“I believe the council did a flood study … and straight away the insurance companies started charging a fortune for their flood insurance,” he told 7.30.
“I just took the viewpoint that the money I would spend on insurance could fix the house anyway.”
NSW government charging insurers
Mr Hall said in New South Wales, premiums were also being pushed higher because the state government charged insurers to help fund emergency services.
The insurance industry wants the levy abolished.
“In New South Wales residents pay almost double what residents in Victoria pay in state government taxes,” Mr Hall told 7.30.
“That is a real disincentive for people to insure their property for what it should be insured for and it can drive a level of under-insurance across the state.”
The New South Wales Government said it had no plans to change the levy or how it was collected.
Mr Littleproud said the current flood crisis also highlighted the need for planning law reform.
“This is a legacy piece of poor governance of both local and state governments,” he said.
“We’ve had state and local planning laws that have allowed people to build in areas where they simply shouldn’t have.”
The Insurance Council said so far more than 22,000 claims had been lodged for flood damage, worth about $350 million.
#AceNewsDesk report ……….Published: Mar.25: 2021:
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