Malcolm Chew, a long-time homeowner in Hawkesbury, NSW is facing a 47.5% premium increase on his insurance despite significant fireproofing measures on his 10-acre property.
His house is fitted with toughened glass, a sprinkler system, and a 120,000-liter water tank with a firefighting pump.
Despite these safeguards, his insurance company did not factor them into the premium calculation, raising his annual premium to over $6,600.
Chew, who has lived on the property for 34 years and has minimal claims history, questioned the increase but was told it resulted from general cost factors like inflation, government charges, and regional claim statistics.
He expressed frustration over the lack of transparency and how efforts to mitigate risk were disregarded.
Insurers cite climate risks and inflation leaving homeowners frustrated with rising costs and uncertainty.This case reflects broader issues in Australia’s insurance sector, where homeowners in areas prone to natural disasters face soaring premiums.
Insurers cite climate change, extreme weather events, and high costs of labor and materials as driving factors for these increases. The Insurance Council of Australia noted that global insured losses from natural catastrophes have exceeded $100 billion for four consecutive years.
Homeowners, however, are increasingly disillusioned by the rising costs and lack of clarity in premium calculations, with some, like Chew, switching insurers in search of better rates.
Industry margins have surged, with companies like IAG reporting a rise in profit margins from 9.6% to 15.6% over the past year.
Greens senator Mehreen Faruqi, who is leading an inquiry into climate change’s impact on premiums, argues that while climate risks justify increased costs, transparency and fairness in pricing are necessary for consumers.
The inquiry aims to address these concerns and seek more government involvement in climate adaptation measures.