By ERWIN CHLANDA
Territory Insurance Office “We’re for Territorians” hiked the premium of a long-time customer in the Alice Springs rural residential area by about 40%, from $2382 to $3206, a difference of $824.
That’s even taking into account a no claim bonus of 30%.
Territory Insurance Office (TIO) is a trading name of the insurer Allianz Australia Insurance Limited. Neither TIO nor Alliance would answer questions about the massive hike.
The Insurance Council of Australia said it would respond but 24 hours after emailing questions, following a discussion with a media person, we still have no replies.
We asked: Are there increases in home insurance premiums in the NT? If so, for what reason? If so, by how much?
And: Do they differ between Darwin and Alice Springs? Give figures, please. Are there occasions of around 50% hikes? If so, based on what?
Withholding of information is routine behaviour by the industry, says Tom Abourizk, head of policy at Choice.
He says the increase in the case of the Alice Springs person is “very perplexing”.
It is common for insurance companies to treat their assessment process as confidential.
It is often a result of changes to insurers’ own re-insurance arrangements, at times with multinational companies.
Mr Abourizk says it’s not uncommon for insurers to hike premiums a year or two after a client signs on, in the usually safe knowledge that people are confused by insurance and keen to avoid going through the hassle of changing suppliers.
This absurdly is punishing loyal customers.
It is increasingly common that premiums are set for individual clients rather than by region.
Mr Abourizk says knowing what the reasons are for the premiums would enable the customers to take measures reducing the risk: Selecting flood safe areas for their homes, installing security devices against people breaking in.
It’s not clear if the industry is reacting to actual pay-outs or to what the media are reporting, including crime.
“Choice has called for a risk database so people can understand what risks insurers are concerned about, engage with them, and if they can address that risk, have a right to get a better price,” he says.
Consumer’s weapons against ballooning premiums include shopping around.
Mr Abourizk says page 60 of the Northern Australia Insurance Inquiry by the Australian Competition and Consumer Commission simplifies how insurers set premiums.
IMAGE from TIO brochure: “Customers” who are smiling.
DECLARATION OF INTEREST: The writer is a customer of TIO.
We used to have our own TIO. It was a not for profit company that provided Territorians with the cheapest cover in the nation. Occasionally it made a small loss that the NT Government covered.
Our TIO had branches in Darwin and Alice Springs.
The CLP government of the day started a PR campaign with the headline “We need to have an adult conversation about TIO”.
Then they sold it cheaply exposing us to market forces forever more.
The TIO office here was closed and staff lost their jobs.
The CLP government wasted the money from the sale.
Now we are reaping the whirlwind.
My house insurance premium with TIO went from $855 to $2802!
Admittedly, we lost our 30% no-claim bonus because we made a claim (the first claim in more than 20 years mind you!) but this is a more than 200% increase over 12 months.
TIO is not doing Territorians any favours. I let them know I will be taking my business elsewhere next year, after being a customer for 22 years.
@ Kristal Lawrence
The main reason for the spike in your premium is your loyalty.
Note that the ACCC inquiry into insurance costs found that Allianz was the only company to punish loyalty.