David Littleproud takes on 'parasitic' insurers' in the bush

A federal MP in regional Queensland is calling for an investigation into insurance companies' conduct in the bush, which he says is a "national disgrace".

David Littleproud, the former Nationals leader and MP for Maranoa, said insurers were inflating insurance premiums in regional Queensland due to a lack of competition.

"They're a corporate cancer,"

Mr Littleproud said.

South-west Queensland residents have reported crippling insurance premium increases of up to 500 per cent over the past few years.

Mr Littleproud has asked the Australian Competition and Consumer Commission (ACCC) to investigate.

He said premiums started to increase in the region about 18 months ago with quotes of between $20,000 and $60,000.

"The one question that no insurance company can answer is, 'What's changed?'" he said.

"It's time that the cop on the beat goes in and investigates these claims because what these companies are doing is parasitic."

Mr Littleproud said he had been working with the six south-west councils to compile a dossier of evidence.

'National issue' plays out regionally

The ABC has spoken to residents in Charleville, St George, Thargomindah and Dirranbandi in the past 18 months who said their insurance premiums had doubled or even tripled.

St George resident Adam Osborne was quoted $60,000 for his home and contents insurance earlier this year, when four years ago he paid $7,000.

Others are being forced to choose between their mortgage repayments and their insurance.

Balonne Shire Mayor Samantha O'Toole said she was grateful Mr Littleproud had taken action.

"There is a complete frustration that south-west councils feel over a very long period of time and just the inability to get any movement from insurance companies," Cr O'Toole said.

Earlier this year, the Southwest Queensland Regional Organisation of Councils (SWROC), made up of the Balonne, Paroo, Bulloo, Maranoa, and Quilpie shires, created a community mutual fund to bypass major insurers altogether.

Cr O'Toole, who is also the chairperson of SWROC, said the organisation had engaged a risk analyst to conduct a feasibility study on the idea and was looking to build a business case.

"I've literally been contacted by over 60 councils across the country that are being impacted by a similar thing," she said.

"That's why I believe our federal government needs to weigh in because it's a national issue."

An ACCC spokesperson confirmed receipt of Mr Littleproud's complaint but said they would not comment on "reports or complaints received or potential investigations".

Insurance council welcomes oversight

Representatives from insurers and the Insurance Council of Australia (ICA) visited St George in April for a roundtable discussion with mayors from the region.

An ICA spokesperson said insurers were working closely with the Queensland Reconstruction Authority and local councils on "practical solutions to reduce insurance costs for residents in southern and western Queensland".

Last week, the spokesperson said insurers welcomed oversight by the ACCC and said the regulator had found through "numerous studies that insurer pricing reflects risk and cost".

"Extreme weather, increasing asset values, and a 40 per cent rise in building material costs since 2022 have put pressure on insurance affordability across the country," the spokesperson said.

"This can be exacerbated in the regions where greater transport costs and scarcer availability of labour can add to the cost of repairs and rebuilds."

Struggle for first home buyers

For some young people in south-west Queensland, it is not the deposit that is the financial hurdle to entering the housing market, but rather the insurance.

Mr Littleproud said it was keeping people from buying property in regional Queensland.

"You're seeing young people who want to get a mortgage but they can't because the insurance premium's higher than the mortgage payment," he said.

Cr O'Toole agreed.

"Once they add their insurance premium, the banks are saying, 'Look, I don't think you can afford this loan,'" she said.

The Balonne Shire is surveying its residents to see how much insurance premiums are impacting their household budgets.

Initial results found that a third of respondents could not get insurance or afford the premiums.

The survey also found 95 per cent of people who responded had received an excessive home ownership premium in recent years, while 67 per cent of people could only get a lower insurance premium if they changed providers.

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