The majority of Queenslanders are against paying a property tax or levy to adequately insure all Australians against natural disaster, an Insurance Council of Australia (ICA) survey has revealed.

The survey of customer expectations about the management of flood claims comprised more than 1600 people classified as “principal decision-makers” in the purchase of home insurance.

It was conducted in late March and early April by Roy Morgan Research, and all participants had bought either home, contents, or home and contents insurance. 

Of those surveyed, 397 were from flood-affected parts of Brisbane, 407 from the rest of Brisbane, 415 from the rest of Queensland and 415 from the rest of Australia.

Of those in flood-affected Brisbane, 24% said they would pay a property tax or levy to adequately insure all Australians against natural disaster, 51% said they would not and 25% said they were unsure.

But more non-flood-affected Brisbane residents were in favour of a levy, at 29%, while 50% were against it, and 21% were unsure.

Queenslanders outside of Brisbane showed support at similar levels, with 28% in favour of a levy, 54% against it and 19% undecided.

More Australians in other states supported the idea of a flood levy, with 33% saying they would pay a levy, 47% against the idea and 21% undecided.

ICA GM Policy, Economics and Taxation Alex Sanchez revealed some of the survey’s results in a presentation titled “Flood Policy, Myth Busting and Future Pathways” at the Institute of Actuaries flood resilience seminar.

Of those willing to pay a tax or levy, around 90% were prepared to pay a maximum of $4 per month, Mr Sanchez says.

The survey found that 49% of Brisbane home policyholders who were affected by the January floods believe insurers shouldn’t pay the claims of those who did not have flood cover, while 31% said the industry should pay.

38% of Brisbane policyholders who weren’t affected by flood were in favour of insurers making payments to those without flood cover, while 40% disagreed.

The figures were more even from respondents in other locations with 39% of other Queenslanders saying the claims of those who did not have flood cover should be paid, while 41% were against the idea.

Outside of Queensland there was more sympathy for the uninsured, with 42% wanting the claims of the uninsured to be paid, while 37% thought they should be denied. Around 20-22% of respondents from each geographic area said they were unsure as to whether insurers should pay the claims of those without flood insurance.

Of those who were in support of paying the flood claims of the uninsured, the most popular reasons given were because insurance companies were profitable enough to pay, and because it is “the Australian way”.

For those against paying the claims of those without insurance, the most popular reasons were because households must be responsible, followed by a fear that it would affect the respondents’ own insurance premiums.

Mr Sanchez says of 576 respondents who said they lived in a flood-prone area, 193 of them had bought flood cover, 208 didn’t buy it and 175 didn’t know if they had flood cover or not.

Of the 208 that did not purchase flood cover, the vast majority said it was because they did not believe they were at risk of river flooding.

The expense and difficulty of obtaining flood cover were not listed as major reasons for not buying the cover.

ICA CEO Rob Whelan says there is strong community support for the provision of concessions or rebates to households which had purchased flood cover, with 71% of all survey respondents in favour of the idea.

Mr Whelan claims in a media release that the survey “supports the insurance industry’s calls for a ban on the building of residences in flood-prone areas, backs the need for a national database of flood risk properties and the need for a standard definition for flood in all policies”.

He adds that the “vast majority” of respondents did not support compulsory flood cover.

But no statistics were provided to back up these claims, and ICA did not respond to repeated calls from insuranceNEWS.com.au seeking further details.

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