People in northern Australia will soon get cheaper property insurance as the federal government announces subsidy plans for the region starting next year.
From July 1, 2022, a $ 10 billion government-guaranteed reinsurance pool will be set up to reduce the high premium burden on homes and businesses due to frequent natural disasters such as recent cyclones and floods. I will.
“This will reduce household, geological and small business premiums by more than $ 1.5 billion over a decade across northern Australia,” the federal government said. Joint media release..
Over 500,000 residential, geological and small business real estate insurance policies are expected to be covered by the reinsurance pool.
Average premiums in northern Australia have skyrocketed over the last decade, according to the report. report From the Australian Competition & Consumer Commission (ACCC) 3-year Northern Australia Insurance Survey.
From 2018 to 2019, the average premium for Northern Western Australia was $ 13,400. That’s more than four times the average of $ 3,300 in other parts of Australia. Average premiums for Northern Queensland and the Northern Territory were approximately $ 6,800 and $ 7,000, respectively.
“This has been a source of serious concern in the north for a very long time,” Scott Morrison told Cairns radio station 4CA on Tuesday.
“What this does is basically put the floor under the insurance industry in northern Queensland, which will bring more insurers into the market,” he said.
“The important thing is that the insurance sector guarantees $ 10 billion, so we can win more companies. This is very important to reduce the cost of these premiums.”
Mark Jamison, chairman of the Queensland Municipal Association (LGAQ), said the new reinsurance pool could help address market failures.
“The reinsurance pool means better access to important home and business insurance for the more than 61,000 North Queenslanders who had to have to do so because they were too expensive,” she says. I did.
However, the prime minister said the government “takes a cautious view of it” and did not predict how much premiums would go down.
Senator Murray Watt, the shadow minister of workers in Northern Australia, said the federal government had promised to resolve the issue as early as eight years ago.
“Now they promise it again, but not until the next election is over,” Watt told Herald Sun. “The prime minister needs to tell the people of the north how much and when the premium will go down.”
Federal Treasury Secretary Josh Frydenberg said the final design of the reinsurance pool will be determined by a task force led by the Ministry of Finance of the insurance industry.