The federal government’s cyclone reinsurance pool has delivered modest relief for some, but Andy Kollmorgen reports for CHOICE that it has failed to slow a wider surge in premiums hitting households nationwide.
“The situation has gone critical in Northern Australia, but such stories are increasingly not hard to come by around the rest of Australia as well,” Kollmorgen writes.
According to the Australian Competition and Consumer Commission, the scheme has reduced premiums by an average of 11% for medium- to high-risk cyclone areas. Yet Kollmorgen notes that costs elsewhere continue to climb steeply, even in regions with no history of extreme weather.
In North Queensland, where the pool was expected to have the greatest impact, strata owners can still face annual premiums of $13,500. Others have lost coverage entirely. Townsville Lot Owners Group spokesperson Andrew Turnour said the ACCC reported in 2016 that 17% of properties in North Queensland were uninsured, with recent estimates putting that figure at 30%. Australian Consumers Insurance Lobby chair Tyrone Shandiman said the gap between high- and low-risk areas remains over 100%, meaning those in disaster-prone zones can pay more than twice the rate of safer regions.
“As for the rest of us, premiums have gone nowhere but up—in some cases way up,” Kollmorgen writes.
The problem is not confined to cyclone belts. In Sydney’s Sutherland Shire, police officer James told Kollmorgen he was forced to cancel his policy after his premium jumped from $2,000 to as much as $11,000 in two years. Even with council documents confirming his home is not flood-prone, insurers applied a blanket flood loading to his postcode, leaving him in breach of his mortgage terms.
Kollmorgen links the rising costs to a sharp increase in weather-related claims. Over the past five years, insurers have paid out $22.5 billion for extreme weather – a 67% rise on the previous five-year period. Since 2020, there have been 14 declared catastrophes and eight other major events, prompting some insurers to withdraw from certain regions entirely.
CHOICE campaigns and communications director Rosie Thomas told Kollmorgen that “Australians’ worry about home insurance has never been higher. Yet, most remain in the dark about the reasons behind their soaring premiums.” She urged the government to expand the ACCC’s monitoring to include both home and car insurance markets to improve fairness and transparency.
Some Australians are taking disputes directly to insurers. In Queensland, homeowner Andrew challenged Suncorp over a 144% premium increase between 2019 and 2024. While the Australian Financial Complaints Authority rarely rules on pricing disputes, Suncorp eventually paid him $2,500 to settle the case.
For many, Kollmorgen writes, the question now goes beyond price hikes.
“Not being able to afford to protect your most valuable asset when economic survival is already tenuous is a deeply personal issue. The financial futures of families and loved ones are on the line.”
