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  • Writer's pictureMagnetic Community News

Cost of insurance has held the region back for decades

Townsville Enterprise has made an official submission to the Federal Government for the Cyclone Reinsurance Pool (the Pool) Inquiry.

As the Pool has been operational for the past three months, Townsville Enterprise has reiterated the concerns raised in its previous submission made in October 2021.

Townsville Enterprise CEO, Claudia Brumme-Smith said the cost and accessibility of insurance for the North Queensland region has been a critical issue for residents and businesses for decades.

“The Reinsurance Pool was rolled out on 1 July and none of the 14 insurance providers operating in Northern Australia have participated in the Pool to date,” Mrs Brumme-Smith said.

“The proposed benefits to consumers will continue to be delayed as the Pool states that insurers do not have to join the Pool until December 2023 for larger insurers and December 2024 for smaller insurers.”

“The rising costs of construction and building materials mean it is more expensive than ever for developers to undertake new housing developments in our region. When you add insurance costs 20% higher than Brisbane, it is difficult to move forward with affordable housing solutions due to the high cost.”

Townsville Enterprise also raised the concern that the claims period does not include 48 hours after the cyclone.

“As North Queenslanders, we know that the effects of a cyclone can continue past this period. Also, other major weather events, like extreme rainfall would not be covered by the Pool – this means the floods in 2019 would not be covered.”

“We deserve affordable and accessible insurance and Townsville Enterprise strongly supports any interventions made to resolve this critical issue that has held us back for decades.”

Townsville Enterprise made the following recommendations in the submission:

  1. The Pool should be reallocated to fund a government-backed insurance body. The Territory Insurance Office is an example of this.

  2. Extend the claim coverage of the Pool to include flooding events. Particularly considering the January 2019 floods, which if they were to occur again, would not be covered under the legislation.

  3. The Pool must incentivise insurance providers to re-enter the market in Northern Australia

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