Insurance Crisis May Close City Detox Centre
Illawarra Mercury
Friday December 21, 2001
The nation's insurance crisis is threatening a successful Illawarra drug rehabilitation centre which boasts a 40 per cent success rate.
Wollongong Crisis Centre - the only one of its type between the Illawarra and the Victorian border - cannot get public liability insurance in Australia and its broker is now searching overseas.
Its policy, held for 24 years without a single claim, expires on December 31 and its insurer has declined to renew it, citing ``a change in underwriting policy".
Insurance broker Graham Quinton said a dozen other Australian insurers had refused to offer cover.
The knock-backs were unrelated to the centre but reflected a hardening in the insurance industry since the September 11 terrorist attacks in the United States and the collapse of HIH insurance, which is now the subject of a royal commission.
Insurance was a seller's market, partly because there was less competition, and insurers were becoming more and more cautious about public liability insurance because society was increasingly litigious.
``I anticipate cover will be obtainable but I am unsure whether it will be affordable," Mr Quinton said.
The centre's existing policy gives it $5 million coverage for $1700 a year.
Any new policy was likely to cost more than $10,000 a year, he said.
Centre manager Will Temple said its loss would leave 300 addicts out in the cold each year.
``We've never had a claim and here they all are telling us to get stuffed - what's the story?" he said.
``We're the only residential detox and rehab centre between Wollongong and the Victorian border.
``We have 12 beds, are almost always full, and a 20-day waiting list.
``Around 40 per cent of the people who come here succeed in staying clean, getting jobs, getting married, being part of the community.
``This is a great example of high-flying mismanagement hurting people at the other end of town."
The centre cost $300,000 a year to run, he said, with $230,000 coming from the State Government. The balance came from a variety of non-government sources.
Mr Temple said that if Mr Quinton found an insurer who would offer the coverage the centre would have to find the money for the premium.
It was either that, or close.
``We would have to cut back services or perhaps lose a staff member," he said.
Member for Wollongong Colin Markham, after talks with the Premier's office yesterday, called on the Howard Government to address the growing insurance crisis. In the meantime, Premier Bob Carr had organised a conference for January to look at the issue and its implications for organisations such as the crisis centre and community and sporting groups.
© 2001 Illawarra Mercury