Rebekha Sharkie (Mayo, Centre Alliance) Share this | Hansard source

Households and businesses are experiencing some of the most difficult economic times in living memory. Many of us in this place have talked about the cost of energy, groceries or fuel or about the economic hardship emanating from these rises. However, there hasn't been much discussion about the cost of insurance. While I've tabled a motion on this matter, I wish to again raise this important issue before the chamber. Across the nation, insurance premiums are rising well above the inflation rate and, in many instances, by more than 100 per cent. This is unsustainable, leaving many households and businesses opting to either not insure their assets or reduce the value of their cover. In doing so, they put themselves in serious financial risk. In the case of businesses, many are simply choosing to close, as they can neither afford the hike in insurance costs nor take the risk of operating without the correct level of cover.

Of even greater concern is that many postcodes have been deemed uninsurable by insurance companies with little or no evidence of increased risk. This is especially true in regional and rural Australia, where insurance companies have argued that the flood and fire risk is high, despite having insured properties in these areas for decades.

What we are experiencing is a complete market failure, and when market failures occur there is a legitimate role for government to intervene. The government must consider the broader implications of insurance premium increases for household budgets and businesses. I call on the government to go beyond consideration and establish an inquiry into the insurance sector to determine if fair pricing mechanisms are setting premiums. If insurance companies are denying cover or pricing people out of the market due to the purported increases in fires and floods, surely they must be made accountable for those decisions. Policy risk must be evidence based, and insurers should be required to demonstrate it.

Lastly, as I mentioned, what we are experiencing is market failure. If insurance companies are going to deny insurance coverage, the government must consider options. Accordingly, I call on the government to consider underwriting premiums as a last resort for postcodes that are deemed uninsurable or experiencing insurance premium increases greater than 50 per cent, because no Australian household or business should be at risk of losing everything they own. We must act decisively and with urgency.

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