THOUSANDS of Hunter residents could be stung with a 300per cent increase in their annual house insurance premiums, following the NRMA’s introduction of a heavy rain and stormwater levy.
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South Maitland residents Ray and Donna Chipperfield received their bill last week and said they felt physically ill when they saw the annual premium of $1115 for their modest weatherboard house had skyrocketed to $3924.
The NRMA confirmed the company had introduced a levy to cover for damage from stormwater, that is, if a storm causes sudden, excessive water run-off that inundates the property.
Mr Chipperfield said he believed the levy would apply to others in his area as well as those homes throughout Newcastle flooded by stormwater in the Pasha Bulker floods of June 2007.
An NRMA Insurance spokesman could not say which Hunter suburbs faced similar premium increases as each property’s risk was assessed individually.
‘‘We take into account factors such as where a property is built on a block, the height of the building as well as the topography of the area,’’ he said.
‘‘Mr Chipperfield’s premium has increased due to our data analysis showing that his property has a higher risk of being damaged by stormwater run-off.’’
Maitland mayor Peter Blackmore said he was flabbergasted when Mr Chipperfield contacted him.
‘‘There have been extensive drainage works done in the South Maitland area and during the June 2007 storm we didn’t have a problem,’’ Cr Blackmore said.
Mr Chipperfield said water had never entered the Devonshire Street house during the 40 years he had lived there.
He has been insured with the NRMA for 42 years.
Many insurance companies have increased premiums since last year’s floods in Queensland and Victoria and because of the increasing frequency of natural disasters, which are driving up claims.
Insurance Council of Australia spokesman Campbell Fuller said the costs of natural disasters would inevitably have an effect on insurance premiums as companies adjusted their pricing to take into account individual risk levels and the increasing costs of reinsurance.
‘‘Other factors including investment returns also influence premiums,’’ Mr Fuller said. ‘‘The size of any premium change will depend on the insurer.
‘‘Home and contents insurance is a highly competitive market and each insurer’s policies and conditions are different.’’
The federal government wants to standardise the definition of flooding in insurance policies so that it covers water overflowing from any natural watercourse or body of water or from a canal or dam.
The Chipperfields, who live in a flood-prone area, have never had flood insurance as it would cost them about $8000 or $9000 a year in premiums.
A spokesman for GIO Insurance said his company’s flood cover included heavy rain and stormwater damage.
‘‘We do not have a stormwater levy, just the flood cover, which includes that,’’ the spokesman said.
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