Price shock: Samar Patel looks out from his backyard during the floods of October 2022. His house was built high enough to avoid being inundated, but he says that didn’t stop his insurer from increasing his premium to $17,000 a year later.
A Shepparton couple have found that even if your home has not been flooded — ever — it won’t stop a major insurance company from inflating the premium by more than 2000 per cent in under two years.
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Neha Samar and Samar Patel paid $750 for their insurance cover, including flood, in the year leading up to the October 2022 floods. Two years later, Allianz’s quote was $17,000.
The couple live close to the Broken River in Oxbow Ave in South Shepparton and watched with concern as the floodwaters rose a year ago.
Thankfully, though, Mr Patel watched the rising waters stop short of their house and even their street.
He estimates their relatively new estate and their house, which is about 10 years old, are built above the 100-year flood level, meaning all the houses in their street were spared.
Mr Patel said that didn’t stop Allianz from increasing their premium to $1500 immediately after the 2022 floods and, then this year, without any additional threat to their property, the company increased its quote again to $17,000.
“It is price gouging, whichever way you put it,” Mr Patel said.
“It’s very clear to me that by increasing the price by 11 to 12 times, you could say 24 times over the last two years, they just don’t want to insure us.
“They just want us to go away. That’s just the way they’re doing it.”
Massive increase: A family living in the River Rise Estate in Shepparton South were shocked when their insurer lifted their home insurance premium from $750 to $17,000 within a couple of years, without their house being impacted by floods.
Photo by
Murray Silby
Mr Patel said he had found another company that would insure the house for $4000, still a 433 per cent increase on the year before the floods.
He said he couldn’t imagine what people who were flooded were going through, given his experience.
He said the stress of the price increases and uncertainty of how much they would rise in the future was taking a toll.
“It is, it is. We’re very happy where we live. It’s a modern place, and we know that even in a one-in-a-hundred-year event, we’re protected, and it’s been tested in the last year, so we’re happy living here, but it seems like the insurers don’t see it the same way,” he said.
A spokesperson for Allianz suggested the individual locations of houses were taken into account when calculating premiums, even though Mr Patel’s home had not been impacted by the 2022 floods and his premium increased markedly.
“There are a number of factors that determine how property insurance premiums are determined, including but not limited to location, amount and scope of cover (e.g. flood), claims history and taxes, such as state stamp duty, emergency services levy (NSW) and GST,” they said.
“Allianz late last year updated risk information, data and modelling, which has provided more accurate information about the susceptibility of some properties to extreme weather events, particularly flooding.”
The spokesperson said the growing impact of severe weather events in the past three years and even supply chain delays and inflation were also factors leading to increased premiums.
“For most customers, the combination of these factors have resulted in increases around the inflation rate, but for customers with high-risk exposures, particularly flood, larger premium increases were needed.”
A spokesperson for the Insurance Council of Australia also pointed to a combination of more severe weather events and inflation as leading causes of premiums rising.
They also advised residents to shop around for the best possible premium as some insurers don’t consider the risk level of each property.
“When it comes to pricing premiums, each insurer has its own underwriting (insuring) criteria, with some taking a postcode-level view of risk while others taking a property-level view,” the spokesperson said.
No escape: A family in Oxbow Ave in the River Rise Estate in Shepparton South escaped the October 2022 flood but not huge increases in their insurance premium.
Photo by
Murray Silby
City of Greater Shepparton Mayor Shane Sali said he was disappointed insurance companies seemed to be taking a blanket approach to the region rather than considering each particular property.
“It would seem as if they’ve simply gone off media reports that there’s been a flood in Greater Shepparton, and somehow that includes every single person having water go through their home, and we all know that wasn’t the case,” he said.
Cr Sali said residents who received an excessive insurance quote could go to the Goulburn Broken Catchment Management Authority’s website (www.gbcma.vic.gov.au) and gather the relevant information that showed their house was not flooded — even though they shouldn’t have to.
“The information and data is available to everyone out there, and the insurance companies should be doing their work behind the scenes to ensure that when they’re sending out renewal notices that it is up to date and current and reflective of exactly where the resident lives,” he said.
