The insurance coverage trade says nearly 230,000 houses face a one-in-twenty likelihood of being hit by floods in any given 12 months, because it warns of a rising danger of individuals in disaster-prone areas not shopping for insurance coverage due to the upper premiums.
As a parliamentary inquiry investigates the fallout from final 12 months’s devastating floods, the Insurance coverage Council of Australia says new evaluation exhibits the excessive price of flood cowl for the sector as an entire, regardless that a small minority of houses faces essentially the most excessive flooding danger.
The disastrous east-coast floods of early 2022, together with in Lismore NSW, have been the costliest insurance coverage occasion in Australian historical past.Credit score: Getty Pictures
The Council’s submission mentioned evaluation of the Nationwide Flood Data Database discovered 229,445 properties – or about 1.5 per cent of all properties within the nation – confronted a one-in-20 12 months flood danger. Greater than half of those properties are in NSW and many of the relaxation are in Victoria and Queensland.
When contemplating rarer floods, the Council mentioned there have been 674,160 properties throughout the nation – or 4.4 per cent of the overall – that confronted a one-in-20, one-in-50 or one-in-100 12 months flood danger.
The submission mentioned that regardless that a minority of homes confronted this degree of flood danger, flooding had accounted for greater than 54 per cent of the trade’s losses up to now 5 years, and it repeated the trade’s name for extra emphasis on catastrophe mitigation.
The information was contained in a submission to a Home of Representatives committee inquiry into insurers’ responses to final 12 months’s east-coast flooding catastrophe, which was the most costly insurance coverage occasion within the nation’s historical past, resulting in $7.4 billion in claims.
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ICA chief government Andrew Corridor mentioned the dangers to houses from floods have been extra predictable than the dangers from storms or different disasters, and advances in knowledge meant insurance coverage premiums more and more mirrored the dangers going through a person property, fairly than a postcode. Insurers have already lifted premiums for at-risk houses sharply, and Corridor highlighted the prospect of extra folks under-insuring sooner or later.
“So we do face a rising danger of a niche for these houses which might be in unsafe areas being hit with the best premiums, and due to this fact both under-insuring or not insuring in any respect,” Corridor mentioned.