A Carrington man is facing an almost 600 per cent increase to his house insurance premiums after the suburb was re-classified to an increased flood risk.
John Martin received quite the shock when he opened his home insurance renewal notice to see his annual premium was listed at $13,218 after paying $1936 the previous year.
Flood cover makes up $10,444 of the new price.
He was expecting a rise after receiving a notice from his insurer Allianz saying Carrington had been re-rated for flood risk, and having taken out an insurance claim on a leaking tap issue during the year.
But he wasn't thinking the quote would be quite the jump that it was.
"I was more surprised than I thought I'd be," Mr Martin said.
Allianz said the company had recently undertaken a comprehensive national review of its flood premiums based on updated government flood maps, data and flood risk modelling.
"For most customers, this resulted in no change or a modest increase in flood premiums," an Allianz spokesperson said.
"In some areas, however, including some areas of Carrington, the updated flood modelling indicated a much higher flood risk than previously."
It comes after a similar situation in Lake Macquarie. Blackalls Park resident Robert Baxter told the Herald he had struggled to insure his home through some providers, while others had quoted him up to $25,000 a year.
The Herald has previously reported that Coastal Risk Australia modelling had shown some areas of Newcastle including Carrington could be underwater by 2100 if worst-case scenario sea level rises came true.
But Mr Martin said when he knocked down and rebuilt on the block back in 2015, the bottom floor of the home was raised by 700mm to avoid flooding after the Pasha Bulker storm in 2007 and even before that he had not experienced inundation issues at the residence during major storm events.
He said he was considering his options, including removing the flood cover from his insurance altogether.
"I'm fairly confident we're not going to get flooded here," he said.
Allianz said it acknowledged the cost of flood cover can be expensive for flood risk properties, which was why it offered optional flood cover.
"So that those who can't afford flood cover can still access home insurance to protect themselves against all the other potential causes of loss or damage, such as storm (especially hail) and fire (particularly bushfire)," the Allianz spokesperson said.
The insurance company put some of the onus onto government, calling for taxes on property insurance to be removed.
"Along with other insurers, Allianz continues its call on the NSW state government to abolish taxes on property insurance, which are exacerbating affordability problems for home owners and small businesses, especially those vulnerable to extreme weather perils like flood," the spokesperson said.
"For example, a home insurance premium of around $13,200 includes over $3,300 in taxes (including GST).
"In particular, that level of premium includes State Government Stamp Duty of over $1,000, and a NSW Emergency Services Levy of nearly $1,200."
Revenue NSW was contacted for comment, but did not provide a response prior to deadline.
