EXPECT A HIKE: Suncorp, Queensland's largest insurer, says house insurance premiums are likely to rise by at least 10 per cent, more if a property has been flooded. Source: AFP
AUSTRALIA'S biggest insurers are accused of abandoning vulnerable customers - and their struggling towns - in their hour of need as residents return to their flood-ravaged Queensland homes.
After ditching the flood ravaged of Roma, Mitchell and Emerald last year by "banning any new premiums", giant insurers Suncorp and Allianz have turned to other regional towns, raising flood insurance premiums by as much as 2000 per cent and refusing outright to do any more business in areas deemed at-risk.
Residents in Ipswich, Gympie and towns in the Lockyer Valley - again scarred by the floods that swept across south-east Queensland in the past week - have been added to the insurers' hit list, even if their homes have never flooded.They are the townships that have been left high and dry; forsaken by trusted companies that price themselves out of the market.
And there is more to come.
Experts predict devastated Bundaberg and Maryborough face astronomical increases in flood insurance that will force many residents to drop their coverage. Grafton is also on the potential list.
Mayors say it is unforgivable to kick a community while it is down. But they have seen the insurers do it before and they know it's coming, they told The Sunday Telegraph.Gerard O'Connell, mayor of the Fraser Coast Regional Council at Maryborough, said: "I think that is a real concern for residents, particularly in places that never usually see this much water, because they will now be noted by the insurers as flood-prone when they weren't previously."
Ipswich mayor Paul Pisasale claims insurers are discriminating by postcodes. Anyone is fair game he says - including his own home, perched on the highest point in town.
"We've been hammered to death," he said. "They've ditched us. They've made record profits and increased everyone's premiums based on postcode, so people are paying through the nose.
"I'm seeing increases from 20 per cent to 2000 per cent. My insurance went up $3000 ... and I live on top of the highest hill in Ipswich.
"If my house floods there wouldn't be a house left in Ipswich. We would have to build Noah's Ark."
Down in the suburb of Moores Pocket, which was struck by the 2011 floods but escaped unscathed by recent floods, Vicki Ash was given little alternative but to pay a whopping $500 monthly increase in her premium.
"I've had neighbours whose premiums went up to $24,000. And they didn't even get hit ."
Maryborough resident Barry Wain's Allianz premium increased to $14,000 with flood cover. He opted out because despite the town's tendency to flood, he has been spared. His only claim in six years was a broken shower screen.
But this absurdity is now common in the mid-western townships of Roma, Mitchell and Emerald. Because of a stoush over the councils' perceived lack of flood mitigation strategies, Suncorp banned new business there last year.
After his laundry was inundated Roma man Brent Klein's Suncorp premium surged 1000 per cent to $12,000. "I looked at the letter and it was $1000 and I thought, 'S ... , that doesn't seem enough'. Then I remembered I pay by the month."They basically washed their hands of me. "I work with a lady whose premium went up to $17,000. I think they just wanted to get rid of Roma."In Emerald, Michelle Rose believes she was given a red flag because her neighbour's house once flooded. Despite her home never flooding, her Suncorp premium jumped from $2500 to $6500.
"They wouldn't even look at our property, weren't even interested," she said. "There was no negotiation,"
The towns are filled with such tales of woe, which are now popping up other south-east Queensland towns and in NSW where flood insurance premiums are also rising sharply. The average flood insurance premium offered by Allianz in Queensland is $8200, compared with the NSW average of $4704.
These insurance companies are a world away from the flood-affected communities.
Suncorp's group net profit boomed to $724 million last financial year, up from $463 million in 2010-11. Allianz's raked in $301.6 million in net profit in Australia. Executive pay at both totalled millions.
Suncorp, which also owns AAMI and GIO, denied pricing itself out of risky markets, saying premium rises were due to a global jump in the cost of underwritten insurance.
Group media executive Michelle Barry would not rule out rampant premium rises in Bundaberg and Maryborough.
"I don't think we are thinking about that yet," she said. "Our focus is on responding to our customers. We know there is concern about affordability; the cost of living is increasing.
"But pricing for risk is absolutely critical. It has to be a strong, sustainable industry."An Allianz spokesman said new flood insurance policies were determined by flood mapping. "We calculate premiums on property-by-property basis," he said.
"It is wrong to suggest that we are discriminating against postcodes or suburbs."
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