Profiting at other people’s expense

The Courier Mail reported on builders massively overcharging victims of Cyclone Debbie and the floods that followed further south. Click here for the article.

This sadly occurs after every natural disaster to some extent and while some as the Insurance Council of Australia state is due to demand surge, some clearly is a giant rip off.

Every trained loss adjuster and claims preparer will be carefully reviewing the scope of works and the costings to ensure they remain fair and reasonable to ensure that insurance remains sustainable in areas likely to be effected by natural disasters. This does take a bit of time but it is necessary for the good of the entire community.

Typically we find that the local builders who wish to remain in the area after the event treat their communities better than the fly by nighters who move in for a quick buck and leave with full wallets and often dodgy work.

The approach LMI is taking wherever we can is to use local builders known to the insured or the brokers. We are finding we are getting better service, better quality and better pricing.

All of us in the insurance industry have a roll to pay in this issue and weed out and black ball the crooks who are preying on people while in a vulnerable state. At the end of the day we will all be paying for it with higher premiums while those in high risk areas may find it difficult to get insurance at all.

On a different but related matter, I appreciate that the pricing of insurance for cyclone risk is very much on everyone’s mind, insured, insurers, and government but I think we all need to take a realist look at the situation. Here is the latest map from the Bureau of Meteorology showing the 1,200+ cyclones that have hit Northern Australia in the time that I have been doing claims.

While as one journalist reported, it looks like a child got to the map of Australia with a crayon, it shows clearly the risk that is confronting us. It therefore disappoints me and many others just how small an investment the Australian Government is making into flood mitigation, in comparison to the waste of money about 1/3 of the investment in flood mitigation spent on a watch dog on pricing when every enquiry shows insurance has been under priced in Northern Australia.

Finally, those that are calling for a mutual really need to take the 101 course in insurance. It is not going to work with the risk of the mutual not having the funds to pay claims in the event of a major event while those who invest in, losing their investment as well. A complete recipe for man made disaster on top of a natural one.

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