Govt urged to mitigate for lower premiums

A major insurer contends that low-cost retrofits will pay off in the long run and argues for government backed mitigation in North Queensland communities.

Suncorp has released a new research report in partnership with James Cook University’s Cyclone Testing Station assessing the economic and social benefits of improving building codes in cyclone-prone areas.

The latest in the ongoing Protecting the North initiative, the report states that as many as 100,000 older North Queensland homes may not meet current wind load codes and that roof upgrades could cut cyclone damage bills by half.

Personal Insurance Chief Executive Mark Milliner says that the report provides an overwhelming incentive for governments to start prioritising mitigation, rather than establishing a mutual cyclone insurer or a cyclone reinsurance pool.

Build to Last shows clearly that cyclone resilience is smart for the homeowner, smart for government and smart for the whole region – it makes good economic sense,” Milliner says.

“Every taxpayer dollar spent subsidising insurance and not retrofitting and building North Queensland to withstand a cyclone, is a dollar wasted on hiding the problem.”

James Cook University’s CTS Director Dr David Henderson says the report is a product of extensive policy and claims analysis.

“We reviewed thousands of Suncorp Insurance policies and claims from Cyclone Larry (2006) and Yasi (2001), and found there was a greater percentage of older housing that suffered significant structural damage compared to housing built in today’s wind load standards,” Henderson says.

Ray Pavey of NQIB agrees that mitigation is a good idea, but emphasises that it needs to result in lowered premiums.

“There has to be a commitment from insurers that they are going to discount for retrofitting these older houses,” Pavey says.

“They have to give a commitment that they will use the new standard to lower premiums.”

The federal government’s Northern Australia Insurance Premiums Taskforce has been looking into options for lowering premiums and is due to release its interim report in the coming weeks.