Recommendations resulting from the strata insurance inquiry are due to be released later this month by the House of Representatives Standing Committee on Social Policy and Legal Affairs.

Federal Member for Leichhardt, Warren Entsch, has been involved in the process which has been established to investigate the sky-rocketing premiums and lack of competition in the strata insurance market.

"I've sat through the committee hearings and all the information I've seen coming through you couldn't help but form the view that strata insurance in Northern Australia has failed," Mr Entsch said.

He highlighted the fact that many insurance companies have stopped assessing risk and are merely exiting the market.

"What has to happen is it has to be recognised that there is a failure in the market. Insurers have to come back here one way or another because we have to have competition.

"We also need stronger watchdogs, there is no insurance ombudsmen, so the insurance companies can be held accountable."

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Mr Entsch said there have been instances where people have been forced to borrow money to pay for their insurance.

"The prices have got to come down and be at a level that people can afford to take insurance given that, by law, you have to have insurance.

"There was a suggestion by one of the groups that we lock in the current prices and they don't go up. In my view that would be a dreadful mistake because the prices are already so inflated, and they are unaffordable."

Mr Entsch said many people have left behind the "quarter-acre block and the Hills Hoist" traditional Australian home to live in higher density housing as a way of cutting living costs, but are being heavily disadvantaged by strata insurance costs.

"I don't want to pre-empt what the recommendations are but I can assure you that those on the committee are very aware of the failure, they're very aware that something has to be done, and it's going to take some radical action to do that."

He compared the current insurance crisis being experienced here with that which occurred after Bangkok's floods and Christchurch's earthquake, and said solutions were found to ease costs and return confidence to insurers.

"People in Thailand are facing exactly the same challenges as we are. The prices went through the roof and the insurers exited the market. The Thai Government are now underwriting it (the insurance sector) and it has bought all the insurance companies back.

"The New Zealand Government now underwrites earthquake insurance. They're looking at the same thing in Japan after the tsunami.

"It's not unheard of in Australia. After 9/11 you couldn't get terrorism insurance and the Australian Government underwrote that and have done so since 9/11 and done so very well."