Insurance changes back on agenda for disaster-prone north
In response to high premiums, and restricted coverage, the Australian Competition and Consumer Commission has recommended further insurance reform.
File photo of waves crashing on the Cairns waterfront during Cyclone Yasi. North Queensland is bracing for Cyclone Gabrielle which has formed off the coast but is not expected to make landfall.(Photo: ABC)
The ACCC has given the Morrison Government the final report arising from its long-running northern Australia insurance inquiry. It comes as Queensland battles bushfires and storms, with cyclones forecast over summer, and as climate change promises an increase in natural disasters.
The government is considering the report and is expected to release it when it provides its final response.
Among the changes previously recommended by the ACCC were the consideration of: government-funded mitigation works, for example flood levees, in areas were properties were all-but uninsurable; changes to the building code to make properties more resilient; benefits for policy-holders who undertake their own mitigation works; and prompts for new home buyers to consider insurance.
The intent was not only to prevent damage, but spread the risk of having to pay for the impact of natural disasters so more consumers can access insurance.
However, in its last report, the ACCC found no governments had acted on the recommendation new home buyers be better informed, and there was also no desire to make changes to the building code. At that stage, before the pandemic and recession, governments and the insurance sector had only made tentative steps towards acting on “mitigation action plans and identifying communities where investment in mitigation will have the most impact”.
Assistant Treasurer and Federal Minister for Housing said the government had received the ACCC’s final report “however, the government is not waiting to act”.
“To date, the government has invested $10 million for phase two of the successful Household Resilience Program in Queensland to protect Australian communities, support local jobs, and put downward pressure on insurance premiums,” Sukkar said.
“Also, the government is extending unfair contract term protections to insurance contracts as part of the response to the Financial Services Royal Commission.
“As the Treasurer has said, further investments to strengthen our resilience to natural disasters will be announced in our response to the Royal Commission into National Natural Disaster Arrangements.”
The bushfire royal commission also recommended changes to the building code, along with guidance for insurances to inform policy-holders of mitigation works that might reduce their premiums, and for any rebuilding works to improve the sustainability of properties and communities.