Fairfax Media Network

Weather News

MP touts ways to ease disaster insurance costs

By Sharnie Kim, Monday February 11, 2013 - 15:16 EDT

Far north Queensland MP Warren Entsch says the Federal Government should underwrite disaster insurance to help bring down high premium costs in northern Australia.

It is one of a number of proposals in Mr Entsch's submission to a Coalition policy committee formed to tackle the issue.

Mr Entsch, the Member for Leichhardt, says it would require a pool of money to help discount premiums and meet potential shortfalls in claim settlements.

"We need to start looking at governments looking at underwriting disaster insurance," he said.

"They already have done it after the floods in Thailand, after the tsunami in Japan and the earthquakes in New Zealand.

"All those governments have done it and in every one of those cases small business and residential insurance is now affordable."

Mr Entsch says the Federal Government should pay the first $500 million in damages in the event of a natural disaster.

He says the money would be raised through a levy and would help insurance companies negotiate a cheaper deal with re-insurers.

"They need to take off the compulsion in relation to flood insurance, particularly in areas where there is no risk of flooding," he said.

"They also need to get governments involved in the catastrophe reinsurance market.

"In northern Australia we pay an extra $30,000-$40,000 a year to build a house because we build to cyclone specifications - that is not taken into consideration."

Mr Entsch says insurance premiums could be halved if the Federal Government amended its Strata Act.

He says body corporates are facing bankruptcy because their insurance premiums are calculated based on the cost to replace a building and there should be an option to insure the building for market value.

"By adding in four words, instead of just a compulsion to insure for full replacement value, if we were to add in there 'or market value' that would make a huge difference," he said.

"That would drop the value of these premiums significantly."


- ABC

© ABC 2013

More breaking news

Sydney Morning Herald
ABC News
National Nine News
News Limited

Display Your Local Weather

Weather News

Cyclone Debbie eye reaches coast; BOM warns storm may last 24 hours

15:32 EDT

The eye of Cyclone Debbie has made landfall along the north Queensland coastline near Airlie Beach, after the eye of the slow-moving category four system passed Hayman Island and hurricane-force winds battered the Whitsunday Islands.

Cyclone Debbie: Residents share stories as torrential rain and wind pummels region

15:32 EDT

Panicked residents in areas affected by Cyclone Debbie have relayed their experiences to the ABC as torrential rain and wind gusts pummel the region.

Cyclone Debbie: What you need to know at a glance

15:16 EDT

Tropical Cyclone Debbie has made landfall on the north Queensland coast.