ACCC investigates rising home insurance prices in Northern Australia

Posted: 24 October 2017 1:23 pm
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Have your say about home insurance prices.

The Australian Consumer and Competition Commission (ACCC) is looking into rising home, contents and strata insurance prices in Northern Australia, specifically in the NT, and parts of QLD and WA.

"The ACCC is investigating why insurance premiums have increased substantially in northern Australia over the past few years," said ACCC deputy chair Delia Rickard. "Our Inquiry aims to identify the barriers that prevent consumers from accessing affordable, appropriate, and comprehensive insurance."

The investigation involves a series of forums to help identify the issues being faced by consumers, and get insights into their experiences with insurers, as well as information-gathering and input from stakeholders.

The forums

"These forums will allow us to hear directly from people in northern Australia about their experiences of the insurance market," said Rickard. The ACCC public forums will be held throughout November and early December in:

  • Townsville - Wednesday, 15 November, Hotel Grand Chancellor, 5:30pm
  • Cairns - Thursday, 16 November, Rydges Plaza Cairns, 5:30pm
  • Darwin - Wednesday, 22 November, Oaks Elan Darwin, 5:30pm
  • Alice Springs - Thursday, 23 November, Aurora Alice Springs, 5:30pm
  • Broome - Wednesday, 29 November, Oaks Broome, 5:30pm
  • Karratha - Thursday, 30 November, Ibis Styles Karratha, 5:30pm
  • Rockhampton - Tuesday, 5 December, Travel Lodge Hotel, 5:30pm
  • Mackay - Wednesday, 6 December, Quest Mackay, 5:30pm

If you're in the area and have been hit with rising home insurance premiums then it might be worth penciling it in.

Property insurance premiums might be exceptionally sensitive to one's address, so this kind of local approach might provide better insights for ACCC to pursue.

Information gathering and stakeholder input

"As a formal inquiry, we will use our compulsory information gathering powers to access information directly from insurers. This is something other inquiries have not been able to do," explained Rickard.

This will help assess the issues faced by insurers, and some of the other obstacles and risks which may stand between buyers and cheaper home insurance. Insurers have previously been found to have been overcharging and ordered to refund millions and it's possible that this investigation might lead to a similar outcome.

Stakeholder input is being sought for areas around:

  • Insurance pricing, the key cost components of insurance, and insurer profitability
  • The competitiveness of markets for insurance in northern Australia
  • How consumers interact with insurance markets including any barriers to consumers making well-informed choices.
  • Other regulatory issues relevant to the insurance industry
  • The role that mitigation can play in improving affordability.

Inflation, rising property values and the increased risk of severe weather events may all be contributing to rising premiums, but there may not be much that can be done about those, other than looking at ways to find cheaper home insurance.

Property underinsurance is still a problem around Australia, and as premiums keep rising and pushing on already-stressed households it might get worse before it gets better. In this way, cheaper insurance might be good for the entire country.

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