Federal Government to slash $2.9b from cyclone insurance premiums

Homeowners and businesses in the North West are set to see insurance premiums drop by up to 60 per cent from July 1 after the Federal Government announced the final design of the $2.9 billion reinsurance pool. The pool aims to reduce over-inflated insurance premiums in cyclone-prone areas of Australia, which in some cases have soared to more than 15 times of those in major population centres. Homeowners in Australia’s north may save up to 46 per cent through discounted premiums, while strata and small to medium enterprise properties are expected to knock off 58 per cent and 34 per cent respectively. The reinsurance pool will be supported by a $10b Commonwealth guarantee and will be overseen by the Australian Reinsurance Pool Corporation from July 1 2022. Federal member for Durack Melissa Price said the insurance pool was expected to cover residential, strata and small business property policies in northern Australia. “The pool is on track for the scheduled July 1 start date which is very important for Durack residents and business,” Ms Price said. The near $3b reduction has been calculated over a 10-year period for eligible residents throughout the north of Australia. Prime Minister Scott Morrison said the legislation was part of maximising northern Australia’s potential and ensuring Australians in these regions have access to the affordable insurance.