Flood risk sends premiums sky high

p2376-flood-map-okBy ERWIN CHLANDA

 

Ren Kelly, an Alice Springs resident whose home has been insured with TIO since the early 1970s, saw his premium skyrocket from $3541 to $8934 this year.

 

He had just two minor claims of around $100 since 1977, and this year told TIO thanks, but no thanks.

 

He found coverage with another company for about $3100 – including flood cover.

 

A spokeswoman for TIO says some customers “have seen changes to their insurance premiums this year as a result of the introduction of risk based pricing.

 

“Up until this year, TIO has shared the cost of high-risk properties across all our customers.  But we do not believe it is fair for customers to be paying for cover they do not need.

 

“Residents living in Tennant Creek should not be paying for cyclones. Residents living in areas not prone to extreme or frequent flooding should not be paying the same as those who are.”

 

The spokeswoman says some people in Alice Springs will see a reduction because the cyclone risk has been removed.

 

“Some of our Alice Springs customers are actually seeing a significant reduction in the order of several hundred dollars or more.

 

“Around 15% cent of our customers across the Territory have had premium rises of $500 or more implemented this year. In Alice Springs, this is mainly driven by the risk of flood.”

 

In Mr Kelly’s case the increase is not $500 but $5000.

 

Says the spokeswoman: “Sophisticated mapping drawn from a number of sources enables us to assess the risk of flooding down to an individual address level.”

 

Mr Kelly says there has never been a flood in living memory in his area. Even in the flood in the mid-seventies, when the town centre was under water, the Head Street area, where he lives, remained dry.

 

 

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11 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Fred the Philistine
    Posted November 29, 2016 at 7:27 pm

    @ Surprised: The council has a lot to answer for. It can’t even send out the correct rate notices. What does the council actually do?
    All I see is people picking up rubbish which really should be picked up by the people who threw the rubbish there in the first place. I have no confidence in the council.

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  2. Hal Duell
    Posted November 29, 2016 at 4:40 pm

    @Yvonne, Posted November 28, 2016 at 4:08 pm
    Any chance you would be willing to share the name of your new insurance provider?

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  3. Surprised
    Posted November 29, 2016 at 7:50 am

    @ Fred the Philistine.
    It was the Government that initially sold all the land off in the first place.
    What about due diligence?
    So now, do we bulldoze the houses and build again?
    IMHO, the Town Council needs to fix the drainage now.
    So, it will be more expensive, but as with most things, if it had been done properly in the first place it would have been considerably cheaper.
    Again we will put blind faith in our ever so caring Town Council. IF they do something, they will put the rates up again, to cover something they should have done before, that we somehow already paid for.

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  4. Yvonne
    Posted November 28, 2016 at 4:08 pm

    I was a TIO customer until the new increase in insurance for flood for 27 years.
    My house is outside the one in 100 flood zone as advised by the Alice Springs Town Council and also the NT Government.
    I was advised by TIO that their sources for determining the flood zones are correct therefore the increase in insurance cost, I tried to find out who their sources are but TIO advised that this information is confidential.
    I then asked the question that the Alice Springs Town Council and the NT Government have got it wrong regarding flood zones and was advised by the TIO rep that yes they got it wrong and TIO sources are correct.
    It was then explained to me that the run off areas such as Chinaman’s Creek made my area a huge flood risk.
    I find that quite interesting since I live nowhere near these areas.
    Oh well TIO lost another customer and I have now got better insurance at a lower rate (less than half that TIO were charging) and it includes flood insurance and extras that were not included in the TIO policy.
    So actually I am now a very happy person and better of financially thanks to TIO as I would not have before looked for alternative insurance as I thought I was supporting what I thought was a Territory company (pre the Allianz takeover).

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  5. Hal Duell
    Posted November 27, 2016 at 9:40 am

    In an article on this subject last year, a comment from a reader mentioned an insurance provider that was tailored to pensioners.
    Does anyone remember the name of that insurer?

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  6. Fred the Philistine
    Posted November 27, 2016 at 6:49 am

    @ Ian Sharp: I don’t live in a flood prone area, so I dont really care. However, I do know if rivers are maintained and cleaned out, by taking away the build-up of sand, removing sapplings, will certainly let the water flow better and reduce the flooding.
    I say if people want to build and live in flood prone areas, then pay for the risk.

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  7. Ian Sharp
    Posted November 26, 2016 at 12:05 pm

    Fred the anonymous Philistine is channeling Pauline Hanson with his environmental expertise based on blissful ignorance …
    “This would not be an issue if the river was cleaned out and maintained … The river will then flow its natural course without flooding.”
    What nonsense. Rivers flood, that is how they build floodplains. And much of the older part of Alice was built on the floodplain. It will get flooded. No amount of cleaning out the river channel will prevent that.
    A big flood is coming, nothing is more certain. All our flood mitigation plans over the years have been based on the hypothetical 1:100 year flood, but that is an arbitrary benchmark.
    With the greater energy being pumped into the oceans and atmosphere by climate change we will experience greater volatility in our weather patterns.
    A series of storms swept in from the warm northern oceans that happen to dump buckets on our tiny catchment upstream of Alice will bring home the reality of our changed circumstances. Fred’s dictum about the river sticking to its channel without flooding will look ridiculous.
    Wishing and hoping won’t get us anywhere, it’s time to get serious about flood mitigation and coping strategies for the town.

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  8. Harold
    Posted November 26, 2016 at 10:01 am

    User pay, seems very fair. If the resident in question is convinced that they’re not at risk of flood damage, then they should source a policy which doesn’t include that cover.
    Crazy to insure something where there is no risk.

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  9. Fred the Philistine
    Posted November 26, 2016 at 6:51 am

    This would not be an issue if the river was cleaned out and maintained.
    Insurance is a money making concern, they are not going to keep taking losses.
    The council needs to take some responsibility and start clearning and removing the debris and excess sand and shrubs.
    The river will then flow its natural course without flooding.

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  10. Dr Who
    Posted November 25, 2016 at 6:01 pm

    There is no reward for staying with any of them for years, as I have found out, they will screw you for small claims if they can get away with it, only interested in themselves and shareholders. Seems the way all big companies have/are going. Just a case of shopping around each year now.

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  11. Greg Latency
    Posted November 25, 2016 at 2:48 pm

    TIO is no longer TIO – its just a name Allianz uses.
    TIO was a supporter of METAL (Motorcycle Rider Training) and now the rumour is that this will be outsourced to private contractors at huge increases to potential riders.
    TIO no longer does motorcycle insurance – oh, well they do if you are crazy enough to pay the premiums they charge, in some cases thee or four times the going market rate – but the message is clear.
    TIO is no longer TIO … sadly.

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