Floods push premiums up with one bill jumping by $2000
INSURANCE companies have admitted that premiums are heading skyward in flood-hit Queensland - but they insist the decision to hit high-risk residents came well before the January floods.
According to the Insurance Council of Australia, companies adjusted their insurance premium prices due to an influx of claims from disaster-prone areas last year.
The ICA also blamed low-investment returns for placing pressure on premiums.
But it's cold comfort for residents recovering from one or even two flood events, and now facing insurance bills that have jumped up to five times higher.
The ICA would not provide the value or number of insurance claims made in Central Queensland following the January floods.
But across Australia, insurers have paid or are in the process of paying more than $8.4billion in catastrophic claims since 2010, including $5.4billion in 2011.
RACQ executive manager Mike Sopinski said as a safeguard all RACQ insurance customers now had standard flood cover as part of their household insurance policy.
'Scared' insurer hikes cost of cover fivefold
WHEN flood water from the Boyne River nudged higher ground near her Boyne Island Tourist Park home in January, Tracy Williams was confident her caravan would be safe.
"I've been in this park for four years and I haven't had a problem with floodwaters," the 43-year-old said.
So when Tracy received a phone call from her insurance provider last week, she was shocked.
Her monthly premium for $60,000 worth of contents insurance had skyrocketed, from $41.89 to $208.07.
From April 1, Tracy, who is looking to move to higher ground, is expected to pay more than $2000 in additional fees per year.
"The insurance companies are running scared," Tracy said.
"My main concern is for the pensioners who live in this park. I don't know how they will be able to afford it."
Tracy has since swapped insurers to accommodate for the large jump.
"That extra $2000 has to come from somewhere. I have bills to pay and other expenses," Tracy said.
"I can't comprehend such a big jump."
One of Tracy's main gripes with insurers is the jargon they feed their customers in product disclosure statements.
"I would encourage everyone with an insurance policy to call up their provider and get them to explain the policy in plain English," she said.
"Some people have difficulty understanding what they are signed up for."
Reader poll
Are insurance companies justified in pushing premiums up so much?
This poll ended on 12 April 2013.
Yes. They have to cover costs
No. Premiums have gone up too much
A small increase is justified
This is not a scientific poll. The results reflect only the opinions of those who chose to participate.
