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Towns too risky for us, says insurer Suncorp

by: By Sophie Elsworth        From: The Courier-Mail       May 07, 2012

THE homes and contents of two Queensland towns will no longer be covered by the state's largest insurer as the fallout from the 2011 floods continues.

Suncorp has confirmed that new policies will not be offered in Emerald and Roma - two of the towns worst affected by recent years of flooding.

Existing policyholders face hikes of up to 10-fold.

Suncorp has a reputation for being the only insurer left in some towns abandoned by southern-based companies who are wary of massive payouts.

But Suncorp chief executive Mark Milliner said Queensland's biggest insurer had taken $4 million in premiums in Emerald and Roma in the past two years and paid out $150 million in claims.

Residents in southeast Queensland have already been hit with premium hikes after the January 2011 floods but Suncorp said it had no plan to spread its ban to the state's southeast because those floods were a one-in-100-years event.

Mr Milliner said it was likely the premium hikes in Roma and Emerald would "rise dramatically" and be "too expensive for many", leaving residents without contents cover for theft and other unforeseen problems.

"Many insurance companies have already made the conscious decision not to offer insurance in very high-risk areas. This is a move Suncorp has so far resisted," he said.

But Suncorp chief executive Mark Milliner said he now felt the insurer had little choice but to exclude Roma and Emerald "unless clear decisions are made to build or implement improved mitigation to protect the residents of these towns".

"We can continue to rebuild our customers' homes however it is not fair for them to have to risk and then rebuild their lives every storm season," he said.

Mr Milliner said Suncorp would "reassess premiums in high-risk areas" if flood mitigation investment was made.

Central Highlands Regional Council Mayor Peter Maguire said a blanket ban of new home and contents policies in Emerald was "overkill" and unfair.

"We have been advised that they are going to cease to write new home and contents policies in the area. It applies to all the Emerald homes that are in the postcode 4702," he said.

"We are sending advice back to them (Suncorp) with a number of things we are doing or have done, like flood mapping, building and planning stuff, weather monitoring, flood management reports."

Mr Maguire said the floods in Emerald in 2008 and 2010 were "two out of the three largest floods in this community".

"We could go another 20 or 30 years without anything," he said.

Mr Maguire said a Suncorp representative had met with the council several weeks ago to advise them of the latest move.

Roma suffered major flooding in 2010, 2011 and in February and resident Mardi Henricks has had enough.

Her property was flooded three times and she said residents would be annoyed at Suncorp's latest move.

"There'll be a lot of anger and I feel very sorry for those people living in low-lying areas," she said.

"A levee bank seems to be the logical solution."

Insurance Council of Australia spokesman Campbell Fuller said companies were entitled to make commercial decisions.

"It is entirely up to each insurance company to decide the products it offers and the market in which those companies operate," he said.

"It is clear the spate of natural disasters has had an impact on the market."

Mr Fuller said in 2011 eight catastrophes resulted in insurance companies receiving more than 275,000 claims and paying out more than $5 billion on top of the normal $30 billion of claims each year.

Last modified onTuesday, 28 May 2013 07:10

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