Senator Nick Xenophon is using his casting vote on the $ I.8 billion levy to force adoption of disaster insurance on the states. He says that Queensland was offered such insurance for a fee of fifty million dollars - but refused.
This is a case of " buyer beware ". The terms and conditions of just what is insured and under what terms is as flexible as understanding the meaning of words - as many a householder has found to his or her peril.
The suggestion is that natural disaster insurance should be a policy issued by one - or a group - of conventional insurance companies - and that they will therefore set the terms of what is - and what is not covered.
Wrong thinking ! Insurance companies are in the business of making profits and their terms and conditions will be naturally restrictive. A better way would be for the states and territories to setup a natural disaster scheme in which they all contribute on a scale proportionate to population.
Natural disasters tend to be spread over long periods of time - and they also tend to happen in one part of the country, leaving other areas unscathed. Grab a pen and the back of an envelope and do a little research. What natural disasters have occurred over the past twenty years - and what sort of funding pool would be needed to restore the damage ?
One of the great advantages of a natural disaster fund run by the states and territories is that these entities would be the ones to set the rules - and decide exactly what the fund would cover. Obviously, limitations would be known in advance - and those limitations would have a bearing on the annual contribution each state and territory would make to the fund.
Time to stop thinking about insurance in the traditional way - and to " think outside the nine dots " to create a disaster fund that is manageable - and which really works !
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