World News – AU – Rising premiums are forcing people like Jodie to forego home insurance, but the ACCC has some solutions

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Like many Northern Australians, Sue Shearer watched with dismay as the cost of her home and contents insurance increased.

Annual home insurance price increases have also increased their corporate fees in a unitary complex where many of the residents are retirees or self-financed retirees.

Ms. Shearer – the executive director of the Council on the Aging NT – calls seniors regularly and says rising premiums are forcing them to make stressful decisions.

« It really is a big decision whether to insure your home or keep your health insurance.

« We’ve been lucky with cyclones for a few years now, but we’re going to get one, and then people without insurance become homeless. So now is the time to look into measures to ensure people can get their homes insured. « . « 

Jodie Went, who lives in Darwin, is one of those who has lived without insurance and lives in a cyclone-hit area, which worries her.

« I have no insurance at all because I can’t afford it, and as a low-income person, everything I own means something to me, » she said.

« Losing everything would mean starting over and that would cost me a fortune. « 

The Australian Competition and Consumers Commission (ACCC) has found that rising insurance costs are forcing 20 percent of people in Northern Australia to live without them – compared to 11 percent in the rest of the country.

The noninsurance rate is highest in Northern WA at 40 percent, followed by 26 percent in the NT and 17 percent in Queensland.

However, ACCC Vice Chair Delia Rickard said the investigation also found that the price increases were due to industry losses rather than price decreases.

« Over the past 12 years, insurers have lost over $ 850 million on home and contents insurance in Northern Australia, » she said.

« The reality is that there are more extreme weather events and more claims and that makes it a very costly place to get insurance. « 

The ACCC is now calling for much more pricing and product transparency so that customers can compare like with like.

She has recommended that the federal government introduce changes in the industry, including requiring standard coverage, providing simple key fact sheets, and standardizing the descriptions of what is and is not covered.

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« For example, in Townsville, when we compare the prices offered by two different insurers, we have a difference of 2. $ 000 detected in the offers. « 

The ACCC also recommended that the federal government set up a price comparison website on which all insurers are represented.

« But when done well, finding the best deal near you will make a real difference, » she said.

State governments have long resisted another of the ACCC’s key recommendations: the abolition of stamp duty on home insurance.

The investigation found that Northern Australians paid $ 5 in 2019. 5 million insurance stamp tax to WA, $ 9 million to NT, and $ 65 million to Queensland.

« Stamp duty increases the cost of a policy in Northern Australia by 9 to 10 percent, » Rickard said.

« If governments do not accept this recommendation, we recommend that stamp duty be based on the value of the insured property rather than the premium value so that you are not punished for being in a country. « High risk area. « 

The ACCC also wants some stamp tax revenue to be spent on subsidies for people struggling to get insurance.

Ms. Shearer urges state and territory governments to implement the stronger recommendation and abolish stamp duty.

« When you have a pension – $ 900 per fortnight – and you live in a house with 500. If you are $ 000, the stamp duty on your home insurance can be $ 200 to $ 400 a year, ”she said.

« People try to budget, but every year these unforeseen costs keep increasing. « 

This service may contain material from Agence France-Presse (AFP), APTN, Reuters, AAP, CNN and the BBC World Service that is copyrighted and cannot be reproduced.

AEST = Australian Eastern Standard Time, 10 hours before GMT (Greenwich Mean Time)

Insurance, Australian Competition and Consumers Commission, Finance

World News – AU – Rising premiums are forcing people like Jodie to ditch home insurance, but the ACCC has some solutions

Ref: https://www.abc.net.au

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