The insurance industry is heading for a showdown with the Federal Government over plans to establish a comparison website for home and strata cover in north Queensland.

The Government is also funding engineering assessments of strata properties, paying $12.5 million over three years to the Queensland Government, which will then give grants to body corporates.

It has provided four years of funding to the Treasury to develop the insurance comparison website on strata and home and contents cover.

“Insurance comparison sites can reduce search and transaction costs for consumers and allow [them] to make more informed decisions about their insurance purchase,” the budget papers say.

The costing is not published “due to commercial sensitivity”.

Most major insurers refuse to participate on comparison sites because of the emphasis on price, while the National Insurance Brokers Association has questioned whether an aggregator can address the complexity of insurance.

“When it comes to difficult insurance-related issues, consumers don’t need a website, they need advice from a competent, qualified professional insurance broker who can advise them on their best options and work to get the best deal from the insurers,” CEO Dallas Booth said.

“The Australian Securities and Investments Commission has already issued public warnings about the shortcomings of commercially operated comparison websites and the difficulties of comparing like with like.”

The Insurance Council of Australia says it will participate in a Treasury consultation announced this month addressing insurance affordability in north Queensland.

Also see ANALYSIS