The insurance industry has welcomed news the first stage of a levee around the flood-prone Queensland town of Roma is weeks from completion but the project is yet to translate into reduced premiums.
The Queensland Government last week announced the $16 million, 5.2km levee would be completed in April and should protect about 500 homes and businesses.
Grant Lorenz, Director of Roma-based Rural Insurance Services, says the imminent completion is a positive step but had not yet translated too much premium relief.
“I personally won’t hold my breath to see the premiums be reduced until the second stage of the levee is completed,” he says.
That stage, involving a 1.6km levee and other mitigation works, is underway.
Suncorp recommenced writing home and contents policies in the area when construction began in September, with an eye to re-pricing the premiums when the levee is complete.
Initial estimates were that the levee would reduce premiums by an average 30%, although the most flood-prone areas could benefit from a reduction of up to 80%.
NIBA CEO Dallas Booth congratulated the Queensland Government for its work in Roma and its call for tenders for further mitigation work in other vulnerable areas across the state.
“The insurance process itself cannot be the only solution to natural weather events such as flooding, as it can only respond after the damage has been caused and communities have been devastated,” he says.
“Money spent by governments on infrastructure that reduces the risk of damage in the first place is far more economically and socially effective than paying out millions of dollars in disaster relief every time there is a catastrophic weather event.”