Broome’s only insurance broker has warned homeowners to keep their expectations in check when it comes to the Federal Government’s cyclone reinsurance pool. The pool was announced in last year’s Federal Budget in response to cyclones and related floods in far north Queensland. It is designed to lower the cost for insurers and policy holders in areas in northern Australia prone to extreme weather events. When the pool was announced, the Morrison Government said it would deliver $2.9 billion worth of savings for homeowners over the next decade and reduce insurance premiums by 46 per cent. However, Broome Insurance Brokers director David Keys said the savings would be nowhere near what was promised for Broome. “The concept is admirable but I’m concerned that some people are expecting significant discounts and they just won’t be there,” he said. “The Government promised the world, big savings of potentially 30 or 40 per cent, but it’s certainly not going to be anywhere near that.” Mr Keys said he had been fielding calls and enquiries about the cyclone reinsurance pool from clients for the past few months and how much they could save once it is implemented. “Don’t believe everything you’ve heard or what you read because the bulk of the savings I suspect will be for far north Queensland,” he said. “Particularly because we’re not having a lot of cyclones over here. We will be at the very bottom of the scale, unfortunately; it might only be a 10 per cent discount.” Broome homeowner and insurance policy holder Chris Maher said the reinsurance pool concept was fantastic but did not think it would lower his bill by much. “My insurance has increased by about 50 per cent over two years and any reduction in that is going to be helpful to me,” he said. “I would welcome a 5 per cent decrease over a 60 per cent increase but a 5 per cent decrease isn’t going to have much of an impact on my bill.” Large insurers have until December 31, 2023, to transition into the reinsurance pool while smaller insurers have an additional year, which Mr Keys said could mean customers will have to wait at least another year to see the savings. “The moral of the story is don’t hold your breath; it still could be a fair way away,” he said. Luckily for policy holders it won’t be necessary to take any action as the savings will come through the insurer. “From the customer’s point of view, they won’t need to do anything,” Mr Keys said. The Australian Reinsurance Pool Corporation has extended the consultation period on the initial cyclone reinsurance pool premium rates until July 31, with the revised rates set to be published by October 1.