Flood cover in parts of south-west Queensland has tripled over the past two years, leaving residents and local councils reeling from the surge in insurance premiums. In a region where flash flooding is a recurring threat—exemplified by periodic overflow of the Warrego River in Charleville—local authorities are now challenging major insurers over what they describe as exorbitant increases that are putting essential cover out of reach for many.
Impact on Local Communities
Residents of south-west Queensland are feeling the financial pinch. Charleville local Sonya Johnstone lamented, “If I pay my insurance premiums I can’t afford to pay my house payments. We are living pay week to pay week.” After seeing their annual premium jump from $3,500 to $13,500 in just two years, Sonya and her husband Michael have decided to forgo flood insurance altogether, choosing instead to “pray to goodness” they avoid flooding. Johnstone’s concerns echo across the community, with many elderly residents forced to abandon cover because the steep premiums are simply unaffordable.
Councils Band Together
In response to these steep hikes, six councils in south-west Queensland have united under the Southwest Regional Organisation of Councils (SWROC). Established in 2020, SWROC represents councils across a vast and sparsely populated region, including areas such as Murweh, Paroo, Bulloo, Maranoa, Balonne, and Quilpie. SWROC’s chair, Samantha O’Toole, described the situation as dire, writing in a recent Senate inquiry submission that having insurance cover is now “largely deemed a luxury rather than prudent financial management.” The organisation is now pressing the Insurance Council of Australia (ICA) for answers, backed by local federal member and Nationals leader David Littleproud.
Political and Federal Reactions
Federal member David Littleproud has been vocal in his criticism. “I think insurance companies are having a lend of us,” he stated, highlighting concerns that insurers are gaming the system at regional Australia’s expense. Littleproud stressed the need for regulatory oversight by the Australian Competition and Consumer Commission (ACCC) to ensure that insurance providers do not continue to impose punitive premiums, particularly after councils have made significant investments in flood mitigation structures. While Prime Minister Anthony Albanese has accused insurers of “ripping off” Australians, no concrete policy measures have yet been announced to tackle the problem.
Insurance Industry’s Justification
Representatives from the Insurance Council of Australia attribute the rising premiums to a combination of factors. An ICA spokesperson explained that the cost increases are driven by the escalating frequency and severity of natural disasters, the rising value of homes, and inflation-driven increases in building repair costs and reinsurance fees. Additionally, the spokesperson noted that many local councils have not updated their flood risk data, with some maps on the National Flood Information Database (NFID) dating back to 2013. This lack of current flood information, they argue, hampers insurers’ ability to accurately assess and price flood risk in these regions.
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The Data Gap and Mitigation Investments
Local councils have taken significant steps to reduce flood risk through investments in mitigation structures such as levees and gully diversions. Despite these efforts, insurers have not adjusted premiums to reflect the reduced risk. For example, the flood levee in St George was constructed in 2014, yet the flood maps used by insurers remain outdated. Murweh Shire Council, which recently conducted a flood risk study after relying on 12-year-old data, is among those frustrated by this disconnect. Shaun Radnedge, deputy chair of SWROC and mayor of Murweh Shire Council, criticized the ICA for continually shifting responsibility back to local councils even after substantial investments had been made. “We’ve done everything the Insurance Council of Australia has asked for and we’re still seeing rises in our insurance prices,” Radnedge said.
Looking to the Future
With the stakes high for a region already burdened by socio-economic challenges, local councils are calling for a more competitive insurance market that fairly reflects the reduced risk achieved through mitigation investments. Ongoing discussions between the ICA and David Littleproud offer a glimmer of hope that a balanced solution may be on the horizon. The outcome of these talks is eagerly awaited by communities across south-west Queensland, where residents, businesses, and councils are united in their demand for insurance that provides both protection and financial sustainability.
As the debate continues, the case of south-west Queensland serves as a stark reminder of the challenges facing rural and regional Australians in a rapidly changing climate. With flood cover costs tripling and livelihoods at risk, local communities are determined to hold insurers accountable and secure a future where insurance remains a safeguard rather than an unattainable luxury.
