Thursday, August 24, 2023

Issue:

Mackay and Whitsunday Life

Fairer Deal Needed For House Insurance

By Kevin Borg, Chairman, CANEGROWERS Mackay

When you live in NQ, you are sadly no stranger to high insurance costs, but when it comes to insuring homes on working rural properties, farmers are really stuck between a rock and a hard place, and our governments need to get proactive on this issue.

We’ve just had a near-miss when it comes to a flood event, but this is North Queensland and floods happen, cyclones happen, and farmers, like everyone else, surely deserve the right to be able to affordably insure their homes against these events, that are simply part of the climate here.

It is scarcely credible, but there is little or no choice when it comes to securing an insurer. There are very restricted options when it comes to farmer's homes on-property.

Most insurers have walked away from farm residences that are on the same title as the rest of the farm. Of the choices that remain, the premiums of two are prohibitive - unaffordable - and do not cover for flood.

That leaves two options, and one of these insists – as part of a raft of strict requirements- that cyclone shutters be fitted to all windows. These cost over $1500 each. Most farmhouses don’t have these, and the cost is so prohibitive, it knocks that insurer out of consideration.

That leaves one player. They are known for good service and – in these times - a competitive price. But a monopoly, even if unintentional, is a monopoly. It is, in our opinion as growers, a market failure.

CANEGROWERS Mackay has a very hardworking insurance broker team, who are astounded by the unfair situation. Our Insurance Manager Geoff Youngs tells us that, as a broker, he’s committed to getting customers the best deal he can, but this is one instance where he cannot offer people comparison or choice. The team has made numerous complaints - without result - to those insurers and cluster groups that they deal with that do not offer fair - or any - coverage for farm domestic dwellings. The team cannot find a reason why this class of home is treated differently to other homes across the region.

Covering a home within the “Farm Pack” that covers the raft of other insurances needed by rural producers- machinery, sheds, public liability, theft, vehicle, material damage- effectively triples the cost of insuring the home compared to cost as a standard residential dwelling.

The situation is made more ridiculous by the fact that, were the house block on a separate title to the productive areas of the farm, most insurers would see their way clear to covering the dwelling, at a lower cost.

The situation is not new. Successive Governments have passed this issue on like a hot potato. While the Australian Reinsurance Pool scheme should have delivered a solution for all of North Queensland, what has resulted is reinsurance coverage for cyclones. It is merely intended to reduce premiums for cyclone coverage, and the federal body has no jurisdiction over any insurance company on their underwriting criteria. So, when it comes to farm domestic dwellings, it offers no improvement in resolving the issue of competitive underwriting of rural producers’ homes.

The State and Federal Government apply both GST and Stamp Duty to these products, further driving up costs.

Living where you farm is part of what keeps our rural communities strong, and part of what makes being a farmer an attractive proposition.

We call upon our elected representatives to all levels of government to step in and argue for our North Australian farmers. If the private market cannot create competition, then the Government needs to re-institute Government Insurance. North Australian communities need insurance solutions that work.

Image: Farmers are stuck between a rock and a hard place when it comes to insuring their on-farm home. Picture: Contributed

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