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$10,000 a year to insure home against floods

WATER TORTURE: Helen Hearnshaw, on the balcony of her house high above the Grafton levy, is trying to work out how she can avoid a huge insurance increase that would take her annual premiums to almost $10,000.
WATER TORTURE: Helen Hearnshaw, on the balcony of her house high above the Grafton levy, is trying to work out how she can avoid a huge insurance increase that would take her annual premiums to almost $10,000.

THE prospect of paying $250,000 in insurance premiums over the next 25 years for her Grafton home has Helen Hearnshaw scrambling to find different options.

Mrs Hearnshaw, who lives in Miller St, saw her home premium go from $1711 to $9600 in April when her insurer made flood cover mandatory.

"I am one of the lucky Grafton people who own a lovely place to live and retire. At nearly $10,000 a year I don't know how I can afford to pay it for another maybe 25 years of my life - a quarter of a million dollars."

The general manager of Westlawn Insurance Brokers, Chris Dougherty said many people are likely to face the same problem.

He said insurers were coming off a period of natural disasters, where the industry had to pay out billions in claims.

"It went from earthquakes in New Zealand, fires in Western Australia, floods in Brisbane and NSW, cyclones in North Queensland and storms in Victoria," he said.

"Thankfully that's stabilised over the past 12-18 months, but insurance companies took a big hit and they're looking at ways to get their money

back and minimise their exposure."

Mr Dougherty said this included putting insurance out of reach of customers.

"Putting their prices up so high people can't afford them, they're really saying they don't want to be in that market."

Mrs Hearnshaw found this out about 18 months ago, when she renewed insurance on an investment property in Prince St.

"The bill went from about $2000 to $8000 overnight," she said.

"I rang around heaps of companies and eventually found a company who would give me a policy without flood cover."

The latest bill shock prompted Mrs Hearnshaw to take a different look.

"To give such an enormous amount every year to a company on the chance that the flood wall breaks is untenable," she said.

"I have had an estimate that I would need about $60,000 to do repairs if the flood went through the ground floor of the house."

She is also looking at a policy with $5000 excess, which lowers premiums to an acceptable level.

"I would have to put $5000 away somewhere to draw on if I needed it, but it makes the premiums affordable."

Topics:  editors picks, flood, grafton, insurance




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