Call for Equitable Cyclone Insurance Subsidies Grows

1

While the pool's review is set for the following year, Australia Consumers Insurance Lobby's (ACIL) head, Tyrone Shandiman, contends that key improvements, especially in pricing models, could be instated sooner under guidance from Assistant Treasurer Stephen Jones. ACIL stresses the necessity of advancing its efficacy prior to the formal evaluation, citing a need for a fairer spread of premium responsibilities.

Recent hearings by the parliamentary Joint Select Committee on Northern Australia, which picked up once more in Brisbane, have rekindled the debate on the government-backed insurance scheme, particularly as the risk season winds down and in the wake of Cyclone Jasper's impact.

Different concerns surfaced during the hearings, with viewpoints diverging on the coverage of flooding by the pool and potential merits of an alternative framework. "Our stance is to perfect the system for cyclones first before tackling flood coverage," remarked Mr. Shandiman. He emphasized the present cyclone insurance model's deficiencies and the beneficial impact of sensible re-modelling.

Another point of contention arose around the coverage for large-scale property developments. While strata property policies witnessed appreciable declines in premiums with the current pool, insurers and consumer advocates alike discuss the struggle for properties with values exceeding $20 million, still facing disproportionately high premiums compared to the nation's average.

To enhance the scope and function of the pool, ACIL released a report last year advocating several changes. The proposals included broadening the time coverage post-cyclone to seven days, increasing regional participation for funding, and even suggesting the inclusion of marine insurance.

Insurers provided differing testimonies before the parliamentary committee, particularly around the contentious 48-hour claim period following a cyclone and whether the scheme should encapsulate flood damages. This divergence of perspectives underscores the complexity of achieving a balanced solution that would appease policyholders while maintaining the financial viability of the insurance pool.

Published:Wednesday, 1st May 2024
Source: Paige Estritori

Share this news item:

Insurance News

Clear

ClearView Names New Underwriting Head Amidst Strategic Changes 30 Jun 2025: Paige Estritori ASX-listed life insurer ClearView has announced the appointment of Peter Tilocca as Head of Underwriting, coinciding with key updates to its underwriting standards and definitions. Tilocca's extensive two-decade career in Australian underwriting includes leadership roles at Zurich, Noble Oak, One Path Life, and RGA Australia. His new role with ClearView commenced on 30 June. - read more

Ombudsman Supports Theft Claimant in Home Business Coverage Dispute 30 Jun 2025: Paige Estritori A recent case has seen a policyholder triumph over her insurer after the Australian Financial Complaints Authority (AFCA) ruled in her favour following a contentious dispute regarding home business operations. The controversy arose when the woman's theft claim was denied by her insurance provider, IAG, over allegations of fraudulent misrepresentation about the use of her rental property. - read more

AFCA Upholds Insurance Fraud Ruling Over Disputed Possum Accident 26 Jun 2025: Paige Estritori A motorist's claim that he crashed into a tree to avoid a possum has been denied by the Australian Financial Complaints Authority (AFCA), which supported the insurer's fraud decision. The incident involved the driver crashing his Jeep—insured for over $20,000—on a dimly-lit street, purportedly avoiding the rain-soaked motorway en route to the store. - read more

Code Watchdog Criticises Insurer for Misleading Rejection Letters 24 Jun 2025: Paige Estritori The Life Code Compliance Committee has recently reprimanded a life insurance provider for issuing misleading rejection letters to policy applicants. These letters were deemed 'ambiguous and contradictory' and failed to clearly inform applicants of their review options after being denied coverage. - read more

Insurer Ordered to Pay Full Claim for Confusing Patio Coverage 23 Jun 2025: Paige Estritori A recent ruling mandates that an insurer must fully honor a storm-related claim due to ambiguous policy wording regarding items in open areas. The Australian Financial Complaints Authority (AFCA) determined that the insurer's restriction on coverage for items in a patio area was unfounded, as the policy's phrasing was not clear. - read more