The Australian Federal Government will be investigating the claimed need for higher property insurance rates in Central and Northern Queensland. Those living in these areas have seen their insurance rates grow at an exponential pace, placing them under heavier financial burden than they have experienced in the past. Some federal officials believe that the rate hikes that property owners have experienced are “ridiculous,” and they want to ensure that consumers are being treated fairly.
Disasters continue to have an impact on homeowners insurance costs
Recent disasters that have hit Queensland are the likely reason why property insurance rates are on the rise. It is quite common for insurers to raise rates for the coverage they provide in the wake of a natural disaster. This allows the companies to recover from their losses. Federal officials believe that some insurers may be overpricing their coverage, however, and intend to discover whether or not this is actually the case. In order to investigate the matter, the government is developing a taskforce.
New taskforce will be examining two options that could resolve the insurance cost issue
The government will be spending $2 million on putting the taskforce together. The group will be responsible for studying two options concerning the rising cost of homeowners insurance coverage. The first option involves the formation of a government-sponsored reinsurance pool that will handle natural disasters. This would mean that insurers would have no viable reason to increase their insurance premiums by large percentages. The other option involves pressuring insurers to change their business plans, forming consumer-owned entities that are more sensitive to the needs of policyholders.
Addressing the issue of growing insurance premiums has become a priority for some federal officials. Queensland is no stranger to natural disasters and the state has been subjected to many catastrophes in recent years. As a result, homeowners insurance premiums have been growing at a faster pace than is considered ordinary, which has caused concern among some federal officials as well as homeowners.
