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.