Insurance customers voting with their feet after rip-off
TWEED residents may have been ripped off because of out-of-date flood- risk information, but the Insurance Council of Australia refuses to take responsibility.
The Daily News broke the story last Saturday and since then we have been inundated with tales of increased premiums.
Tweed residents have reported hikes of as much as $8100 annually on their home and contents insurance because a flood- mapping blunder resulted in every property in the Tweed being classified as a high risk of flooding.
But the Insurance Council claims premiums were not inflated, saying insurers had based pricing on information available at the time, such as "histori- cal records and older low-resolution flood maps for assessing flood risk in the area".
"The modelling is not incorrect because insurers set premiums based on the data they have or are provided with," a spokesman said.
But Tweed Shire Council acting GM Troy Green said there had been a blanket high-risk across the shire that incorrectly presumed every property in the Tweed was at risk of flooding.
Banora Point resident and former RACQ Insurance customer Keith Buckland was just one of many residents who contacted the Daily News to say their premiums rose considerably on renewal as a result of the incorrect mapping.
"About a month before our insurance was due they gave us a call and they said it would go up to $10,400 from $2300 so I said 'excuse me'," Mr Buckland explained.
"I asked why and they said it's because our place had been rezoned in a flood area. The insurers are trying to take everyone for a ride."
Mr Buckland said his home in Kimberley Circuit was built nearly 2.5m above the footpath and was still 1.8m above floodwater during January's severe flood this year.
He eventually settled with a much-cheaper policy from Budget Direct, who did not require him to purchase flood cover
RACQ executive manager insurance communications Mike Sopinski said the risk was validated by the National Flood Infor- mation Database, local council flood maps and their policy exposure.
"Premiums have increased due to the numerous weather-related incidences in the last few years and the consequent increase in reinsurance costs," he said.
"This is the customer's (Mr Buckland's) first policy renewal since flood cover as standard was introduced on RACQ insurance policies.
"RACQ has assessed the customer's property as at very high risk of flooding."
Questions regarding refunds for customers were evaded by the Insurance Council, but they did say new zoning data provided by Tweed Shire Council would be available to insurers by the end of the year.
Tweed Shire Council refused to comment any further.
Did your premium rise? Let us know. Phone 07 5523 6247.