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Insurance premiums are expected to increase by over 20 per cent for some in South-East Queensland, according to a strata professional.
Andrew Staehr, a partner of Archers, said a hardening of the insurance market has followed the recent storm created by Cyclone Debbie in the north of Queensland.
Queensland’s more tropical climate is more susceptible to natural weather disasters, and this factor combined with the weakened state of the Queensland economy has resulted this recent hardening, according to Mr Staehr.
“The SEQ market has been stable with increases in line with annual indexation – until now the large rises had been felt in areas in central and north Queensland above Rockhampton. Increases of more than 200 per cent were not uncommon in the Whitsundays region following Cyclone Debbie,” he said.
“This hardening of the market means that direct market products are most affected because claims are invariably tougher than normal and there is less of an appetite for negotiation with clients.
“That’s where the services of a broker are even more important because they can continue to source the most competitive policy coverage and will fight on your behalf to get every single dollar you deserve in a claim.”
The two factors of natural disasters and underperforming economies has also been felt Australia-wide, which as a result, although emphasised in South-East Queensland, impacts the insurance market overall, which means insurers are reducing their exposure to potential claims and increase their own income to build up capital, Mr Staehr stated.
Recently, Mr Staehr has noticed insurers placing more scrutiny on home owners and assessing risk.
“The use of more accurate flood mapping software along with increased scrutiny of building materials means that insurers can now exclude particular suburbs or streets if properties do not meet their underwriting criteria,” he warned.
In the current hard insurance market, Mr Staehr said home owners can also expect higher premiums, insurers unwilling to provide discounts or insure a building above a certain sum insured, and shopping around to find a better deal would be hard due to lessened competition.
In real estate, insurance is a contract or policy that protects an individual or entity’s property from damages and losses, receiving reimbursement from an insurance company.