By Emily-Rose Toohey
After an insurance embargo was placed on the region, as discussed at 9 March Southern Downs Regional Council (SDRC) meeting, insurers have explained that this is commonplace in times of emergency.
However, the embargo on the region’s insurance has since been removed.
A spokesperson for the Insurance Council of Australia (ICA) said when an insurer uses an embargo on a particular area or postcode, it is a decision made by the independent insurers in the region, who determine the duration of the embargo.
“Because general insurance is intended to provide cover for unforeseen events, when a significant event is extremely likely or imminent, insurers may use an embargo and stop accepting new business due to the elevated risk,” the spokesperson said.
“This is common practice across the industry.
“Industry constantly reviews areas that are embargoed and aim to lift restrictions once the imminent threat has passed.”
The spokesperson said that any advice relating to an embargo is provided by external consultants who assess significant events and threats by peril and intensity.
“The existence of embargoes plays a role in the affordability and availability of insurance by preventing adverse behaviour by people taking out policies when an event is imminent,” the spokesperson said.
SDRC Mayor Vic Pennisi said at the 9 March council meeting that he would write a letter to insurers about the embargo.
“That is a common practise we found out, there’s no point sending a letter because the embargo’s gone,” Cr Pennisi said.
“They put an embargo on us for a short period of time, it happens after every major event, but we weren’t aware that’s a process that they do.”
Before deciding to write the letter, Cr Pennisi said he needed to find out more background information, which is when he discovered it was common.
“I was told, ‘you’re wasting your time because it will be over in a couple of days’,” he said.
SDRC CEO Dave Burges echoed the Mayor’s sentiments, and said that it was routine practise.
“They freeze all you accounts and all your applications while they’re dealing with the emergency,” Mr Burges said.
