Soaring insurance bills are putting pressure on Queensland’s already desperate housing market and gouging Queenslanders during a cost of living crisis, Queensland councils have warned.
Mayors from across Queensland say the State and Federal governments need to step in to make insurance coverage fairer, more affordable and more available to cover more homes.
“There has been a dramatic rise in the cost of flood insurance premiums faced by Queensland homeowners, particularly in the aftermath of flood events in 2022,” Local Government Association of Queensland chief executive officer Alison Smith said.
“This surge in premiums has resulted in financial hardship for homeowners, as some have been offered unaffordable premiums, while others have been denied insurance coverage.
“Councils have invested significantly in flood mitigation projects since 2012, yet communities are not benefiting as they should.
“In Australia’s most natural disaster-prone state, the LGAQ calls on the State and Federal governments to urgently implement measures to make flood insurance affordable.”
City of Logan Mayor Jon Raven criticised the insurance industry at a public meeting in Beenleigh in April as part of the Federal Government’s ‘Inquiry into insurers’ responses to 2022 major flood claims’.
Mayor Raven told the public hearing that the insurance industry needed to share with customers the methodologies it uses to calculate premiums and, show greater transparency on how flood risk is priced into policies.
He cited several examples of Logan residents whose insurance premiums had soared and described some of the increases as "gouging".
“The challenges posed by the 2022 major floods in Logan underscored the need for systemic change in how we approach insurance coverage in flood prone areas,” Mayor Raven said.
Balonne Shire Council Mayor Samantha O’Toole said that disaster mitigation was critical to the liveability of her community, but that promised insurance relief has not materialised.
“Investment in disaster levees that protect our rural communities in the south-west should help reduce insurance premiums,” Mayor O’Toole said.
“We have two similar properties, one inside the levy bank protected area and one outside of it.
“Recent insurance bills from both properties show identical spikes in their insurance premiums.
“Why is mitigation not achieving lower premiums?
“Increasing insurance costs are having a real impact on people and businesses in our rural community, one that has seen three flooding events in the last year alone.”
Mayor O’Toole also said unaffordable premiums could impact the housing market.
“We have a housing shortage and these premiums could make it worse, because you need insurance cover to get a mortgage.
“If fewer people can afford insurance because of where they live, then we are going to have fewer homes available which will just exacerbate the housing shortage.”
Mackay Mayor Greg Williamson said escalating insurance premiums had been an ongoing issue for North Queensland residents and business owners for many years.
“Earlier this year, Mackay council representatives met with strata title stakeholders who are concerned about their rising premiums and the prohibitive cost impacts,’’ Mayor Williamson said.
“Their rising premiums are adding to cost of living burdens in our region and affecting housing affordability at a time of a housing stock crisis.”
Mayor Williamson said a Federal Government Parliamentary inquiry into the issue of insurance premiums in North Queensland had resulted in the implementation of a Reinsurance Pool Scheme for Australian insurers.
“The deadline for insurers to sign up has not yet passed, so we’re yet to see any benefits of that scheme,’’ Mayor Williamson said.
“However, given the coal royalties generated from our region, the State Government also needs to step in and help with a solution to ease insurance pressures.”
Maranoa Deputy Mayor Cameron O’Neil said governments of all levels had been investing in flood protection but it was not being reflected in premiums.
“Governments of all persuasions – local, State and Federal – have been investing to protect our communities yet there’s been a huge spike in insurance premiums,” Cr O’Neil said.
Reducing insurance premiums is one of a suite of cost of living measures included in the LGAQ’s Vote for Local election platform.
To have your say, and see which candidates’ priorities most closely align with yours and deserves your vote at the October 26 election, visit voteforlocal.com.au.
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