Postcode Insurance

Reporter: Damian Hanson

We're told recent natural disasters have pushed all our premiums up...way up.

But tonight we can reveal how the actual threat of fire storm or flood is being ignored by insurers determining your premium by your postcode alone..

"It is like insuring your cars as to what colour they are it has no relevance to what the car is." Said Frank

Frank Beverage is mayor of charters towers regional council in western queensland..a region home to the town of homestead.. postcode 4816.

"Palm Island has the exact same postcode as Homestead and we've got areas above Townsville below Townsville in that one postcode it creates a difficult situation." Said Frank Beverage

Palm the name suggests is in an island off the far north quensland coast.. here tropical cyclones are a real threat..

Three hundred odd kilometres south west..out back.. In homestead..

They've never experienced a cyclone... Ever.

"I don't think you could get a lower emergency rating on a township then where these people live yet the insurance company has been a little bit lazy.. very lazy." Said Frank

And it's happening all across the country...

Grace Clemo from seaford in victoria was a racv customer for more than half a century.

"They said we are now in a flood prone area but we've never had floods in this street or even anywhere around and I have lived and worked in this area for over forty years." Said Grace

Grace had home and contents, marine, caravan and motor insurance bundled with racv then this year she received a letter saying her area had been rezoned as a flood risk area .. So compulsory flood cover was added to her policy.

Angela Connelly owns angies guest house in cairns.. a half way house and emergency accommodation for people who've fallen on tough times.. it's a place she's poured both her heart and money into..

Her insurance premium soared from $7000 to $22000 a year.

"People who are on fixed income or low incomes as the premiums rise and they continue to rise at this pace they might find that even basic insurance is not affordable anymore." Said Chris Groth Research Manager

Chris Groth is the research manager at financial services company canstar.

"Certainly our analysis shows that there can be quite substantial differences in premiums even within the same post code." Said Chris Groth

That's why the people of homestead are lobbying for their postcode to be changed.

"Some of these are retirees and they've finding their homes well over a thousand dollars, they should be three four hundred dollars." Said Frank Beverage

Australia post say how insurance companies use the postcodes they've assigned is up to them.. but postcodes were never developed with risk in mind rather just efficiency for mail delivery

But there are ways to make sure you're not paying for expensive unnecessary cover.

"If your property has never flooded and there is no history of flooding in your area ask if you can have an opt out or if you can opt out of that flood cover." Said Chris Groth

If your insurer allows you to..

So now is the time to review your cover.

This is where canstar has done some of the hard work for you.

"In building insurance ANZ and Comm insure won our national award." Said Chris Groth

In the contents category..

"It was CommInsure and AAMI." Said Chris Groth

They took canstars top gong

"In our package award was Comm Insure and AAMi. We've noticed in our research in some regions there is up to 6 fewer insurers actually providing quotes. Particularly, when you get into the tropics like north and western Australia and Northern Queensland." Said Chris Groth

As for Grace she says she could be forced to run the risk of being uninsured.

"Consumers should not just accept the first price they are given and shop around and see if they can get a better deal." Said Chris Groth


Contact details

Canstar -