Marina Insurance Crisis: Northern Australia Marinas Encounter up to 300% Increase in Property Insura

Australian Consumers Insurance Lobby Inc (ACIL), a leading advocate for consumer insurance rights, is raising alarm over the deepening insurance crisis faced by marinas in Northern Australia. It follows a forum held by ACIL in partnership with the Marina Industries Association for Marina owners in Northern Australia on 19th July 2023.

At the forum, ACIL heard alarming stories from marina operators in Northern Australia, highlighting the dire circumstances they are facing. One marina operator shared their experience of a staggering 330% increase in property insurance premiums over a span of just seven years. Similarly, another marina witnessed its property insurance costs more than doubling in the past year alone. These skyrocketing premium increases are placing an immense strain on the financial viability of marinas and posing a significant threat to their long-term sustainability.

The forum also shed light on the fact that the rising costs of insurance are compounded by the lack of adequate cover for cyclone-related damages with some marinas being partially insured. Many marinas in Northern Australia face excessive excesses of up to $500,000 to $1,000,000, imposed either by insurers or out of necessity to reduce already high premiums. Such burdensome excesses further strain marinas' financial resources, leaving them vulnerable in the face of potential cyclone-related risks.

“The consequences of this marina insurance crisis extend far beyond the marina owners themselves. Boat operators, both private and commercial, are feeling the impact of skyrocketing insurance costs. The combination of high insurance premiums, lack of adequate cyclone cover, and increased marina berthing fees has led many boat operators to consider relocating to more affordable options in southern waters. The varying costs of insurance are causing social disparity between the northern and southern parts of Australia.” ACIL Chairperson, Tyrone Shandiman said.

ACIL has engaged in extensive consultations with marinas and boat operators, seeking to address the pressing issues surrounding insurance affordability and coverage. The disparity between premiums and cover is causing significant social and economic disparity between Northern and Southern Australia.

ACIL in partnership with the Marina Industries Association and various marinas in the region is actively engaging with the Federal Government and Australian Reinsurance Pool Corporation.

“We are calling for immediate action by including marine insurance in the Cyclone Reinsurance Pool. Such inclusion would provide much-needed relief to marinas in Northern Australia, mitigating the escalating insurance costs and ensuring their financial stability. Alternatively, ACIL urges the government to consider subsidising premiums for Northern Australia marinas until the 2025 ARPC review of the Cyclone Reinsurance Pool, providing immediate relief and supporting the growth and viability of these vital community assets.” Mr Shandiman Said.

Consumer Forum - Strata Insurance Practices

We are delighted to announce the Australian Consumers Insurance Lobby Inc (ACIL) consumer forum on Strata Insurance Practices. In this forum we will specifically be speaking about the issue of commissions in strata. The details of the forum are as follows:

Date: Wednesday, 12th July 2023

Time: 2:00pm - 4:00pm

Location: Zoom (link provided on invite)

Express Interest

To express your interest in joining the forum, please send an email to info@acilobby.org.au. In your email, kindly provide the following information:

• Name:

• Email:

• Involvement in strata industry (committee member, lot owner, consumer group representative, strata manager, onsite manager, supplier, etc.):

• Brief summary of your views on Strata Insurance Practices.

• If you are a consumer with a specific story to share, please provide details of your story.

Due to the anticipated high number of participants, we regret to inform you that not all individuals who express interest will be invited to join the forum. Our aim is to ensure a productive and inclusive discussion, considering diverse perspectives and experiences.

Please note that, for now, we are not extending invitations to the strata management industry to participate in this forum. However, we plan to invite the Strata Community Association, the representative body for strata managers, to discuss the issues raised at a later date.

We kindly request that you provide us with the requested information by email and our team will carefully review all submissions and extend invitations based on various factors such as relevance to the topic, diversity of perspectives, and space availability.

We appreciate your understanding in this matter, and we encourage you to share your valuable insights and experiences with us. Should you not be invited to this particular forum, please note that we will keep you updated on the progress of this issue.

Thank you for your interest in the ACIL's Consumer Forum on Strata Insurance Practices.

ACIL Calls for Government Action on Market Failure in General Insurance

The Australian Consumers Insurance Lobby Inc (ACIL) has asked the Assistant Treasurer Stephen Jones MP, to commission a comprehensive report or inquiry into market failure in the general insurance sector. ACIL raises serious concerns about the impacts of climate change and emerging risks, such as cyber threats, which are exacerbating the challenges faced by consumers.

Market failure in insurance occurs when consumers are unable to afford or obtain insurance due to market forces of supply and demand. ACIL highlights the growing problems of affordability and availability of insurance, exemplified by the case of Cyclone insurance in Northern Australia, which required intervention from the Federal Government through the establishment of the Cyclone Reinsurance Pool.

Moreover, ACIL points to instances where consumers are burdened with excessive premiums for flood and bushfire insurance, with some home insurance premiums soaring as high as $20,000 in the aftermath of recent natural disasters. These alarming examples underscore the urgency and significance of addressing market failure in the general insurance sector.

The impacts of market failure in insurance are far-reaching and detrimental to society. ACIL highlights the following consequences:

• Cost of Living Pressure: Unaffordable insurance premiums disproportionately affect financially constrained individuals and businesses, in the worst case leaving them underinsured or uninsured.

• Increased Vulnerability: Inadequate or unavailable insurance coverage leaves individuals and businesses exposed to financial risks, leading to hardships, bankruptcy, and loss of livelihoods. This undermines community resilience.

• Inequity and Social Disparities: Market failure exacerbates social disparities by limiting access to affordable coverage for individuals or communities facing higher risks, particularly in disaster-prone areas.

• Burden on Government: Insufficient insurance coverage places a strain on government resources and safety nets as individuals and businesses turn to public assistance in times of financial distress.

• Reduced Disaster Resilience: Market failure hampers recovery and resilience in regions prone to disasters, as inadequate coverage hinders rebuilding efforts and the ability to recover from losses.

To address these concerns, ACIL proposes that the government commissions a report or inquiry focusing on market failure in the insurance market. The report should encompass crucial areas such as identifying market failures, examining current challenges, recommending measures to reduce the impact of market failures, identifying emerging risks, and providing guidance for consumers, insurers, and the government on appropriate actions.

ACIL emphasizes the necessity of government action to address market failure in insurance, ensuring a fair and efficient insurance market that best serves the interests of Australian consumers. ACIL forward to engaging in further discussions and providing additional insights into their concerns.

About ACIL: The Australian Consumers Insurance Lobby Inc (ACIL) is a consumer advocacy group dedicated to promoting the rights and interests of insurance consumers. ACIL works to ensure fair and affordable insurance coverage for all Australians, advocating for transparency, accessibility, and accountability within the insurance industry.