RACQ Insurance has called for tax deductions to be made available to people taking out insurance in cyclone-prone north Queensland.

In a submission to Federal Treasury, the Brisbane-based insurer says tax deductions on premiums would “immediately assist with affordability”.

A spokesman told insuranceNEWS.com.au tax deductions would also reduce levels of non-insurance and underinsurance.

The insurer’s submission is in response to a Treasury call for ideas to reduce premiums in north Queensland. It says homeowners pay about two-and-a-half times more than other policyholders in the state.

RACQ Insurance says it is taking steps to tackle the affordability issue. From September it will allow customers to pay a “voluntary excess” of up to $3000, which would save as much as 40% on up-front premiums.

Federal Treasurer Joe Hockey says the Australian Government Actuary will finish its inquiry into the cost of insurance in north Queensland by October 31.

He told Parliament last month the Government is assessing feedback from submissions to a discussion paper on the cost of home and strata cover.