Insurers gouging, says Bligh

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30 January 2012

Queensland Premier Anna Bligh has called on insurance companies to be fairer on pricing policies.

Speaking in Cairns last week, she said some insurers are guilty of “gouging” customers with premium rises.

“It is clear that some insurance companies are increasing at a rate that I think is beyond reasonable,” Ms Bligh said. “Some insurance companies are lifting rates by such a high level it can only be described as gouging.”

But a spokesman for the Insurance Council of Australia told insuranceNEWS.com.au the number of natural disasters in northern Queensland was going to have an impact on residential policies.

“Typical increases throughout Australia for home and contents have been up 10%,” he said.

“The Federal Government recommendations requiring insurers to apply flood cover will see some risk areas facing increases.”

The spokesman also pointed out events in Australia last year resulted in $105 billion of claims – 75% of the Asia-Pacific region’s total number of claims.

Householders in flood-affected regions have been reporting 100% rises in premiums and some commercial businesses have reported rises of 1000%.

The increases have not just been limited to Queensland, with Victorian state MP Bill Sykes reporting premium increases in the Benalla area following last year’s floods.  

He says his offices have received a number of complaints about premium rises, including one that reported a 500% increase for a property with a low flood risk.