Homeowners insurance rates spike following last year’s bushfires

Tasmania Brushfires homeowners insurance

The cost of coverage has soared in Tasmania after the massive disaster of last summer.

The massive bushfires in Tasmania that made headlines throughout the summer season, last year, are now having an impact – quite a dramatic one, in fact – on the prices that are being paid for homeowners insurance coverage.

Property owners in the Tasmanian region are now seeing considerable increases at the start of this summer.

In fact, the homeowners insurance premiums in Tasmania are now rising far higher than people in Western Australia and Victoria, South Australia. This follows an increase of 27 percent in building coverage and a 40 percent increase in contents coverage when compared to the amount paid in 2011. This, according to the data from CANSTAR, the financial analyst firm.

Tasmania Brushfires homeowners insuranceThere are only two areas of Australia that are now paying more for contents and homeowners insurance.

These two areas that have higher homeowners insurance and contents coverage rates than Tasmania are in Queensland and New South Wales. Tasmanian average home coverage rate rose from $486 to $666 per year, while contents coverage has spiked from $343 to $480 per year.

The data from the Insurance Council of Australia has shown that the bushfires from January in Tasmania cost insurers a total of $79.2 million. A research manager from CANSTAR, Mitchell Watson, explained that despite the increases that have already occurred, there will likely be even higher premiums in New South Wales due to the fact that the bushfire season in that area is proving to be a particularly devastating one.

Many in the social service sector are beginning to worry that families in Tasmania that are already struggling to be able to keep up with their homeowners insurance premiums may find that they are no longer able to manage, placing them at a notably higher risk of experiencing a total financial disaster. Many reports are already being released that are showing that people in some of the lowest income brackets but who have been able to come up with the money to be able to purchase a home are now discovering that their ability to purchase coverage for that property is shrinking.

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