A Brisbane homeowner whose annual premium increased by more than $4500, primarily due to his flood cover, has lost a bid to have his insurer’s decision reviewed.

The policyholder turned to the Australian Financial Complaints Authority after the rise from $2027 to $6596 last year. Renewal documents showed the policy’s flood cover increased from $1171 to $4829. 

Insurer Allianz said the price was affected by several factors, including severe weather events in 2022, rising property repair costs and updated risk modelling on the claimant’s property.  

It said it relied on information from a licensed flood database that classified the home as a “significant risk”.  

It said a previous underwriter had set the earlier premium, which was “considerably lower than what it considers appropriate based on its risk and pricing framework”.

The insurer also provided evidence that it charged a discounted premium in 2022 and 2023.  

The complainant said the price was unfair because his home was not a major flood risk. He noted floodwater had not been within 200 metres of his house since the 1970s and the property was halfway up a hill.

He referred to an online flood mapping tool from Brisbane City Council that he said showed a 0.05% chance floodwater would reach a neighbouring property.  

The complaints authority acknowledges that the council map shows a low chance of flooding, but it notes the map shows overland flow is likely to affect the home.  

It says Allianz is entitled to rely on its own data to calculate the threat and the pricing is reflective of its interpreted risk.  

“The insurer has shown it relies on different data, which rates the complainant’s property as a high flood risk. It is not open to AFCA to review the factors and weightings the insurer applies to determine the risk rating of the property.

“The information provided does not show the insurer calculated the premiums incorrectly based on its usual practices, and it did not misrepresent or fail to disclose the premium to the complainant.”  

The homeowner said it would be fair to remove the flood cover due to the disagreement over risk, but Allianz said it “does not tailor its policy to suit individual needs”.  

AFCA accepts that but notes the insurer offers other products with optional flood cover, and the insured can choose to review his policy and select one that suits his needs.  

Click here for the ruling.