01.A number of Queensland towns no longer black-listed as infrastructure improves
The construction of a new levee to protect the Queensland town of Roma against floods has led major insurer Suncorp to announce a reduction in home insurance premiums by an average of 45%.
The company recently told Insurance News that 90% of properties in Roma, which saw hundreds of homes destroyed by the 2011 Queensland floods, now face zero flood risk.
For a $400,000 home in Roma, premiums for Suncorp and Vero customers have reportedly dropped from about $7000 to $1000 a year.
And, for some homes, premiums could drop by as much as 90%, Suncorp announced.
"Suncorp promised that if disaster risk levels came down, so will the price of insurance, and today we honour that commitment," Suncorp’s Personal Insurance CEO Mark Milliner told Insurance News.
St George levee has similar effect on premium reductions
In March this year, Suncorp announced a 15% premium reduction for residents of the south-west Queensland town of St George when their policies came up for renewal, following the opening of a new levee built to protect that town. That premium reduction took effect on 10 April.
"St George is a great example of how we can all work together to reduce not only the risk of heartache, and possibly threats to lives due to the weather, but also to reduce the pressure on families’ back pockets," Mr Milliner said in March.
"Many communities throughout Australia could be better protected – and pay lower premiums – with the right funding for disaster mitigation, government policies and land-use planning. We look forward to working with councils and governments across Australia to encourage further investment in mitigation strategies for the benefit of homeowners and residents."
Suncorp says it has paid out almost 170 claims in St George since 2008, due to natural disasters and extreme weather at a cost of more than $5m.
In June, CHOICE partnered with the Climate Institute in releasing a report that warned home insurance premiums for at-risk homes could rise by as much as 92% by 2050 as climate change continues to trigger extreme weather events. As a result, property values in some areas could drop by up to 20% within the term of a mortgage, the research showed.
No premium reduction without new levees
Following the construction of a new levee in Charleville, customers of Suncorp personal insurance brands, which include Suncorp Insurance and AAMI, saw average premiums drop from about $3000 to $990 a year, Suncorp says.
In the wake of the 2011 floods, the company stopped offering home insurance to residents of Roma, Charleville and Emerald.
"The embargo on new business has since been removed from Roma and Charleville, but remains in place in Emerald where no firm commitments to new flood mitigation are in place," the company says.
Residents of Emerald who had Suncorp policies before the 2011 floods have seen their premiums jump, with one homeowner reportedly receiving a renewal notice asking for $17,901.81.
Other levees are planned or under construction in the Queensland towns of Maryborough and Mundubbera and well as the cities of Cairns and Mackay.