Quake could push insurance costs up in Australia

Households across Australia could be forced to dip into their savings accounts in order to pay for an anticipated increase in home insurance policy costs.

On the back of the recent Queensland floods, a number of consumer groups warned that everyday Australians could be asked to pay more for their cover as the biggest insurers deal with claims running into the hundreds of millions of dollars.

Now, with both IAG and Suncorp bracing themselves for a raft of claims related to the Christchurch earthquake, it seems even more likely that everyday policies could be put up, despite the fact that both of these firms have reinsurance policies in place that will cap their losses at NZ$100 million, the Australian has reported.

At present, however, the exact cost of the earthquake to insurers is not known, with Suncorp chief executive John Heagerty admitting that he has "absolutely no idea", whether his firm will have to deal with more claims than the 4,500 they dealt with following September's quake in the New Zealand city.

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