Calls to roll out cyclone and flooding reinsurance pool to all Australian disaster-prone areas

A community legal centre has recommended a taxpayer guaranteed scheme be accessible to all Australians in high natural disaster risk areas, not just the north. The Federal Government is seeking feedback on the design of a reinsurance pool for cyclone and related flood damage. It is estimated the reinsurance pool, to come into effect from July 1 next year, would reduce insurance premiums across northern Australia by more than $1.5 billion for households and businesses over 10 years. Financial Rights Legal Centre has submitted a recommendation to the Australian Treasury stating additional measures are needed to address insurance affordability for people who are vulnerable to extreme weather and the effects of climate change. Financial Rights chief executive Karen Cox said the centre had provided legal advice to Australians who are under-insured or not insured at all because the cost of buying home and contents insurance was unaffordable in some regions. “Access to insurance should be equitable and fair for all people across the country and government intervention to address insurance affordability should consider all areas and all extreme weather events, including bushfire,” she said. “Australians need standard cover and definitions so that they can compare apples with apples when buying insurance and are not caught out by unexpected exceptions and conditions at claims time.” Karratha Mayor Peter Long said it was too early to tell how beneficial the move would be. “It might be as little as just a few hundred dollars off your policy but we’re hoping it’ll be much bigger than that,” he said. “Insurance companies actually divide the country up into zones and the north is in one zone anyway, so when tropical cyclone Yasi happens in Queensland, our insurance premiums go up.” Durack MHR Melissa Price said the reinsurance pool would save North West building owners money. The reinsurance pool will cover cyclones and related flood damage from July 1, 2022.