High natural disaster risk and premiums on the rise - your input appreciated

Do you live in a high natural disaster risk area of Australia and have you seen you home insurance premiums rise in recent years?

We’d like to hear from your for a story I’m working on. Please leave a comment, send me a DM or email jblakkarly@choice.com.au with your thoughts.


Will this also include insurance premium increases in low and normal risk areas? Or to put it another way, are normal and low risk areas subsidising those who ought to expect higher premiums in high risk locations?

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We’re all in this together?

Insurance risks appear to be a moving target. Places that have not experienced severe events are now more likely to be affected. It may be we only have 100-200 years of recent history to consider? We are constantly changing our physical environment? It may be partly due to climate change? Much to consider.

In addition the cost of materials and labour etc to repair or replace has increased significantly. Building regulations can also require higher standards. Houses today are far more expensive to build than days past.

Whether a single property is at a lesser or greater risk of damage or loss, the industry is about making a return on assumptions from statistical averages. There are many reasons insurance costs are under pressure and likely to rise faster than we might want.

I’m not sure how to interpret “We are all in this together”.

I don’t live in a large bush block, surrounded by woodland, spectacular views of rolling hillside; neither do I live in a large ocean fronted block exposed to sea level rises, but with equally spectacular views across the sea.

Should I, living in a boring suburb, not close to any such amenity, but although boring and small, relatively low risk, have to subsidise those who do? I’m probably like most.

Should my household Rate and Insurance premium increases be linked to those in High Risk, but often spectacular locations, but subject to natural disasters, is the question?

This thread specifically regards such locations.

It’s relevant that the weather events driving some of the most recent major calls on insurance are not unique. Nature does not constrain itself to just one part of Oz over any other. Those of us living on an elevated block surrounded by suburbia might think we are immune from extreme events.

It seems all to easy to find examples of severe weather affecting the most urban environments. Events for which there is no precedent.

Insurers note such events and consider if it can happen in one urban environment it can happen in any other. It’s worth considering that while insurance premiums for more urban Australia are going up, the cost to those in higher risk areas are going up even faster.

We have never claimed on house and contents insurance, but with no changes, our renewals went down by 19% and 21%, after years of rises. Our house, sheds etc are unlikely be impacted by bushfire, flood, cyclone and too far inland for coastal erosion. Property values are low, but rebuilding costs high. I have not asked why the reduction.

Before 1 July 2013, a fire services levy charge was added onto insurance premiums in Victoria (and other states??) to recover the cost of insurers’ contributions to the Country Fire Authority and Metropolitan Fire Brigade.

Following a recommendation from the Victorian Bushfires Royal Commission, the collection method was changed. From 1 July 2013, the levy was removed from insurance premiums, with property owners contributing via their council rates. To an insured it appeared as a reduction in premium unless they scruitinised the line items. Insurers informed their policy holders as did the councils and the overall effect on the day should have been ‘net zero’, just who paid whom and how changed.

Could that be part or even all of it?

Qld collects a Fire & Emergency Levy through Council rates - for us $115/yr

Suncorp recently wrote saying they would no longer cover Air BnB like activities. This premium notice also says “…there is no business activity …” So I am guessing the combination of low risk, no business, no claims, no strangers staying added up to a lower premium.