Australia is facing a critical issue with home and business insurance as more properties become uninsurable due to the increasing risks of natural disasters. Approximately 750,000 properties are deemed highly at risk, while another 1.5 million are classified under moderate risk, making it a daunting challenge for many Australians to secure coverage.
In Taree, a resident named Mario Agius experienced the devastating effects of flooding that recently destroyed his home. He recounted the struggle of trying to elevate his belongings, ultimately losing everything as the floodwaters rose. The financial strain is evident, as he highlighted the staggering increase in his insurance premium, which soared from around $4,000 to $37,000 per annum, making it unaffordable.
Other Taree locals, Kerrie and Glenn Williams, did manage to obtain insurance but only after negotiating a high excess to lower their premium following severe floods in 2021. Out of 38 homes in their area, only three were covered, illustrating the widespread insurance challenges faced by residents.
In the Victorian city of Shepparton, forecasted statistics are alarming, predicting that by 2030, an astounding 90% of homes could be uninsurable due to flooding risks. These cities, among many others, exemplify the trend that is affecting numerous regions across Australia, with Climate Council economist Nicki Hutley indicating that around one in 23 properties is now at risk.
As the impact of climate change becomes more pronounced, insurers are struggling to balance premiums against risk exposure. Australian Insurance Council CEO Andrew Hall noted that while homeowners are understandably upset, insurers have no choice but to raise rates in response to escalating costs—particularly in the wake of inflation affecting construction and repair expenses.
Despite existing protections for consumers through bodies like the Australian Financial Complaints Authority (AFCA), the mechanisms in place provide little assurance to those living in disaster-prone areas. The Climate Council is urging the government to implement better planning and mitigation strategies for flooding and bushfires, stressing the importance of building resilience in affected communities.
Failing to address these challenges may lead to further disruptions and fatalities, with insurance becoming increasingly unattainable for a growing number of households. The call to action is clear: there is an urgent need for comprehensive measures to prevent the situation from deteriorating further, ensuring communities can withstand the impacts of natural disasters.