For immediate release 31 October 2012

MEDIA RELEASE

NQ insurance premium hikes exposed

Price gouging of North Queensland was exposed in parliament last night as Federal Member for Dawson, George Christensen delivered examples of outrageous insurance premium hikes. Mr Christensen and Member for Leichardt, Warren Entsch, raised the issue in the Coalition joint party room yesterday where Opposition Leader, Tony Abbott, heard the message and said it was unacceptable that people were being slugged with high insurance costs because of where they lived in Australia. Mr Abbott has asked Shadow Assistant Treasurer, Matthias Cormann to work with Mr Christensen and Mr Entsch on a potential policy response. Mr Christensens office was flooded with examples this week of insurance companies treated the north as a limitless ATM, including home insurance premium rising from $1,992 to $8,133 in a single year for a home that didnt flood in the 2008 one-in-200-year rain event. Another example saw an insurance premium for a two-bedroom Mackay home rise from $2,642 to $13,616, which the owner refuses to pay. Examples came from homes, businesses, and farms across the north, including Mackay, the Whitsundays, Bowen, the Burdekin and Townsville, as well as north to Ingham, Cairns, and Port Douglas. Some of the most dramatic premium increases came from body corporate managers and owners of units and apartments. Unit owners are compelled by law to have insurance but some are not able to purchase any either because the insurance companies wont offer it or because premiums are priced higher than property owners can afford, Mr Christensen said. The insurance market in North Queensland has failed and the Gillard Labor government has rejected proposals to fix the problem. Instead of expanding the use of the Australian Reinsurance Pool Corporation set up by John Howard, Labor raided the fund, taking $400million to prop up Wayne Swans illusion of a budget surplus. Mr Christensen joined a parliamentary inquiry into strata title insurance affordability last year but the Labor government implemented only one of the recommendations, which was to ask the State government to forgo stamp duty on insurance policies.

Labor has just handballed the problem to the State government and refused to take any responsibility for the problem, Mr Christensen said. The only thing the Federal government undertook was to commission a government actuary report, which turned out to be a regurgitation of propaganda from the Insurance Council of Australia. The actuary report took data from a small selection of insurance companies about a five-year period that included the 2008 flood in Mackay and Cyclone Yasi in 2011, which was the worst cyclone to hit Queensland in almost a century. The report said: I have not found that insurers have been price gouging. Mr Christensen said that was because the report did not look. You cant just look at two years (2008 and 2011) where insurance companies paid out more in claims, commissions, and operating expenses to come to the conclusion that the insurance companies havent been charging enough for their premiums, he said. Insurance companies have been making money of North Queensland for decades and the report completely ignored that. The whole point of insurance is to spread risk and by isolating a narrow window of time in a narrow region that just happens to include two big natural disasters, the Labor government is demonstrating a complete lack of understanding on the issue.

The premium hikes George exposed:

YEAR TO YEAR
Home $1,992 to $8,133 (up 308%) in Glenella $2,642 to $13,616 (up 415%) in South Mackay $1,128 to $4,272 (up 279%) in Andergrove Units $13,569 to $48,000 (up 253%) in Bowen $25,157 to $102,554 (up 308%) in Mackay Harbour Farm $10,000 to $19,000 (up 90%) in Mackay

OVER THE TOP

$7,000 Unit in Whitsundays

$20,000 House in Townsville $26,000 House in Ingham $29,000 Farm in Mackay $2,200 Driveway in Mackay

Video: http://youtu.be/aZTLog5VvkY

ENDS For further information, contact Dave Westman on 0402 411 984