The Insurance Council of Australia has hit back recent media reports lambasting insurance companies for the cost of Contents insurance premiums.
On Monday, the Daily Telegraph and other News Limited tabloids accused insurers of “gouging” on home contents insurance, drawing a link between increasing premiums and significant falls in the cost of consumer goods.
An ICA spokesman slammed the newspaper articles as inaccurate and misleading.
“The prices of many individual items may have fallen in recent years, but households own more of them; the average contents policy claim size has soared more than 30% in the three years to June,” he says.
“A large part of the premium for home and contents policies is made up of exposure to natural hazards at an individual risk level, and common risks such as house fires and burst pipes.
“Key drivers of premiums are the impact of catastrophes on communities and the cost of reinsurance following a global reassessment of Australia’s risk by global reinsurers.”
The spokesman also laid some blame for rising premiums on insurance taxes.
“NSW policyholders pay an Emergency Services Levy on their policies, which is compounded by the addition of GST and state stamp duty,” he says.
“Queensland recently increased stamp duties on home/contents and motor premiums to 9%; [and] last year Tasmania increased its stamp duties to 10%.”