News Asia16 Jan 2020

Australia:Insurers halt sales to fire-affected areas

16 Jan 2020

Two of Australia's largest insurers have suspended sales of insurance policies to fire-affected areas in New South Wales and Victoria.

Suncorp and IAG have put a temporary embargo on areas across both states in a move to stop people from panic-buying insurance at the last moment before their homes are destroyed, reported Financial Standard.

A Suncorp spokesperson said, "Insurance is intended to provide cover for unforeseen events. When a significant weather event is extremely likely or imminent, and therefore no longer unforeseen, insurers may put an embargo in place to stop accepting any new business, given the elevated risk."

"This is common practice across the industry. There are exceptions for existing customers in certain circumstances, such as when you are buying a home. We are constantly reviewing areas that are embargoed and aim to lift restrictions once the imminent threat has passed."

To date, Suncorp has received over 2,600 bushfire-related claims, with a total cost of between A$315m ($217m) and A$345m. IAG has received 2,800 claims with an estimated cost of around A$400m.

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Recent Comments

WhyDoWeNeedInsurance

Perhaps all their other customers in unaffected areas should take their business elsewhere ... Insurance companies make money from betting on unlikely situations happening (or likely situations at a high premium). The total cost of A$315 is a drop in the ocean of what insurance companies make each year, I'm sure even with these claims they will still make a profit at the end of the year.

16 January 2020

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