Residents like Matt Hoogland from Darwin have reported substantial hikes in their home and contents insurance premiums. Since purchasing his home in 2021, Hoogland's premium has increased by approximately two-thirds, despite not making any claims. He currently pays $3,562 annually for coverage through TIO.
The Australian Competition and Consumer Commission (ACCC) noted that the median home and contents premium in the Northern Territory increased by 11% during 2023. Strata insurance policies saw a 7% rise in the same period. The ACCC highlighted that insurance in northern Australia remains significantly more expensive compared to the rest of the country.
The cyclone reinsurance pool was designed to reduce premiums by lowering reinsurance costs for insurers, with the expectation that savings would be passed on to consumers. However, factors such as a hardening global reinsurance market, extreme weather events, and rising building material and labor costs have offset potential savings.
Consumer advocates are calling for a restructuring of the funding model for the cyclone reinsurance pool to ensure that the intended benefits reach policyholders. In the meantime, homeowners are encouraged to review their policies, compare offerings from different insurers, and consider measures to mitigate risks to potentially lower premiums.
