Decreases in commercial cover or higher excesses are signs that some businesses can’t continue to keep up with rising premiums, says GE Commercial Business Finance MD Bob Dodd. He says businesses have struggled more than ever this year.

 “A larger excess is a high-risk solution because if a business has to make a claim, paying out more excess will impact further on cash flow,” he said.

Homes and businesses affected by the recent outbreak of bushfires in NSW have served as a timely reminder of just how many people are continuing to carry their own risk.

Christopher Henri, National Co-ordinator of the Insurance Disaster Response Organisation, said many insured people are still failing to properly estimate the cost of replacing their home and contents.

But those who have been prudent enough to purchase full coverage can end up footing the bill for the rest of the community through higher premiums and consequently higher taxes on their cover. NIBA CEO Noel Pettersen said there is no doubt that state-imposed “taxes on taxes” deter home and business owners from insuring at all.

“People then have to rely on government handouts when disaster strikes,” he said. “Those companies and individuals who pay to protect their assets are the ones most penalised and disadvantaged by government taxes.

“Ironically, it takes a disaster to highlight the heavy burden that state taxes impose on those who are prudent enough to insure and protect their assets, themselves and their families,” Mr Pettersen said.