Resident hit by insurer after fires

Resident hit by insurer after fires

15 November 2013

published by

Australia — A MONTH after bushfires ravaged the region a Murrays Beach resident has been told her home is too risky to insure, leaving her stuck facing higher premiums and with potentially hundreds of other Hunter residents in the same predicament.

Mimi Pellicaan received a letter from her insurance provider, Real Insurance, eight days after she was evacuated at the height of the fires that swept the Hunter in October.

Its contents left her gobsmacked.

‘‘As a result of a recent underwriting review, we have identified that the address in which the above mentioned property is located may have an exposure to damage by bushfire and a decision has been made to no longer offer cover in such areas,’’ it read.

‘‘Your policy will cease effective 11.59pm on 28 November 2013 … we apologise for any inconvenience caused.’’

The news has left Ms Pellicaan facing potentially higher insurance premiums with other providers, and wondering when the next insurer will pull the pin.

‘‘I didn’t sleep that night. I just thought bloody hell, if the insurance companies aren’t going to insure me I’ve got to sell, but if I can’t get insurance no one is going to buy the place,’’ she said.

‘‘I’m a single person who worked hard for my little house. If it burnt down and I didn’t have insurance I’d be poor for the rest of my life.’’

Real Insurance, part of the Holland Group, offers low-cost premiums for home-and-contents insurance.

In a statement on its website published three days before Ms Pellicaan’s letter was sent it wrote it was ‘‘there to help our clients affected by the fires, who have home, motor as well as landlord insurance policies with Real Insurance’’.

However in a statement it defended its decision not to offer a renewal and said the timing was a coincidence.

‘‘Like all insurance companies, we strive to keep premiums for our policy holders across Australia at affordable levels,’’ a spokesman said.

‘‘To do so we review our underwriting criteria regularly.

‘‘Regrettably, while the underwriting criteria had been revised from early 2013, for a few of our customers, the timing of the expiry of their current term of insurance, and the notification of our changed underwriting criteria, arrived at the same time as the recent devastating bushfires.’’

Regardless of the timing, the decision has Murrays Beach residents asking whether other insurance companies could soon follow suit.

Edward Todd-Jones, who lives in Murrays Beach close to Ms Pellicaan, said he believed the implications could snowball.

‘‘Commonsense would say it would be a slippery slope effect, when one starts doing it others will follow and you’re going to get everyone living near the bush being marginalised,’’ he said.

‘‘The immediate impact is insurance companies will increase our premiums.’’

A spokesman for Stockland, the developer of the Murrays Beach community, said the company was disappointed with the decision.

‘‘All homes at Murray’s Beach comply with the relevant NSW government building and fire safety codes,’’ he said.

‘‘In the aftermath of any natural disasters and severe weather event, Australians want to know that they can count on their respective insurance providers.

‘‘We were very disappointed to learn of the refusal.

‘‘We would encourage the resident to seek an alternative insurance provider.’’

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