Insurance companies are under pressure to justify their high premiums as they start to sift through thousands of claims in the wake of ex-tropical cyclone Alfred. While experts fear many affected by the latest disaster will be under-insured, the industry says governments could do their part to reduce costs, by slashing the taxes added to cover.
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00:00Still rebuilding from the 2022 floods, the New South Wales city of Lismore has been hit
00:08again by ex-tropical cyclone Alfred.
00:11Adele Wessel's home was unscathed, which is lucky because to make insurance affordable
00:16she slashed her cover after her bill jumped by $900.
00:21I increased the excess that I was going to pay and I also reduced the value of the home.
00:28Adele's bill shows taxes are driving up her costs by more than a quarter.
00:32New South Wales and Tasmanian residents are triple taxed, paying insurance stamp duty,
00:38emergency services levies and the GST.
00:42People elsewhere pay two taxes, except for the ACT where there's only GST.
00:48The ACT removed its 10% insurance duty and replaced the lost revenue by increasing rates
00:54for homeowners.
00:56We were prepared to expend some political capital and it did, it cost us votes, but
01:01now nearly eight years on it's barely mentioned.
01:05The insurance industry wants other governments to do the same.
01:09It is an insidious tax in that it keeps continuing to rise with the cost of insurance premiums.
01:15Maureen Faruqi chaired an inquiry late last year which recommended the federal government
01:20should incentivise states and territories to abolish insurance taxes.
01:26Unless federal government steps in and actually tries to make insurance cheaper, these communities
01:33will continue to suffer.
01:35The ABC asked all states and territories, none are considering cutting insurance stamp
01:41duty.
01:42The New South Wales government plans to remove the emergency services levy, but there's no
01:47timeline.