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TAXES and levies are the main reason people living in rural NSW are under insured against bushfires and other catastrophic events, according to the Insurance Council of Australia.
Representatives from the council are currently visiting the Drake and Tenterfield areas, preparing to assist those affected by last weekend's bushfires in northern NSW.
Head of Risk at the council, Karl Sullivan, said there is an under insurance problem in rural NSW, motivated by taxes and high costs.
"People in Queensland are far better insured than in NSW, there is an under insurance problem particularly for rural NSW, and the leading driver of that is the amount of tax and levies that people need to pay in their insurance policies rurally," he said.
"Later this year there will be examples where it's 50 per cent tax and levies on top of your premium, so it's started to get very expensive for people rurally to insure properly.
"One of the ways they accommodate that risk is by purchasing less cover," he added.
The executive said rural NSW could end up with a considerable under insurance problem.
"That's something that we will measure as we go through this particular event," he explained.
"Those taxes add a lot of cost to the premium, that's a lot of money off a business or household budget.
"They make a decision to buy less insurance as a result."
Mr Sullivan said the has not been an increase in calls to the Disaster Hotline (1800 734 621) after the Insurance Council of Australia (ICA) declared a Catastrophe for bushfires in northern New South Wales and south-east Queensland on the weekend.
"We have seen a few call coming out of Queensland, but we have only received an extra 30 or 40 calls above normal numbers," he said.
"We do find that (the number of calls) starts to pick up in the weeks following, not immediately after, as people gets settle and understand what they have lost, then they start the insurance journey."