No Insurance ? Think Again !

When money is tight, one of the first things to be dropped is usually insurance cover for the house when the premium renewal comes due.  The biggest fear in owner's minds is usually of having a house fire, but in today's red hot Sydney home market that is a fast fading fear.

The value today is not the actual house.  It is the land that the house is sitting on and we are fast heading into a "knock down and rebuild  " culture.  Where a fire has destroyed a home, many are finding that the vacant land brings an even greater price than they would have expected for the former house and land package.   For the owners of an "average " suburban home this is a positive disincentive to insure.

This week an event in Bexley illustrated how the lack of insurance can inflict disastrous loss that is completely out of any control by the home owner.  In the early evening, a woman and her two children heard a knock on their front door.  When they opened the door to investigate, a man barged into the house in a frenzy, smashing his way to the bathroom and barricading himself behind that door.   The householders fled to a neighbour and called the police.

For over three hours the police employed a negotiator to try and coax this man out and during this time he completely wrecked that bathroom, shouting and screaming in a frenzy as he tore fittings loose and threw them out the window and onto the lawn.  The shower, vanity basin and even the toilet suffered this fate.   Eventually, the police forced their way in, throwing flash/bangs to disorient the offender and firing Tasers - and carted him away in an ambulance.

This was a thirty-four year old total stranger who was suffering the deranging effects of Ice.  Under the influence of this drug and totally psychotic he picked a house at random - and did damage that will be well in excess of fifteen thousand dollars to restore.   It is unlikely that he will have the means to pay restoration, and this will land on the shoulders of the unfortunate house owner.

Fortunately, most insurance companies now make insurance available on the basis of a monthly premium payment, but the premium cost is ever increasing.  We have seen increased storm activity which many blame on global warming and the need for insurers to spread their cover by reassuring on the world scene sees premiums here influenced by world weather events.   A major flood in the rivers of Europe may increase insurance premiums here by a few extra dollars.

One of the peculiarities of insurance costs in this state is funding for the fire brigade is added to insurance premiums by way of a levy.  The fire brigade attends all fires, hence those who are insured are paying for a service which the uninsured have available at no cost.  It has long been demanded that this anomaly be rectified.

It would be logical to remove that levy and make insurance premiums cheaper and replace that fire brigade premium onto councils, to be collected by inclusion in the rate charged on all housing.  This would spread the cost evenly across the entire community and at the same time encourage people to insure because of the lower premium cost.

Buying insurance is a personal decision each person either makes or rejects but the present method of funding the fire brigade is unreasonably selective.   If that service is available to all housing, then it should be paid for by a levy spread across the entire stock of housing.