Insurance cover for weather events increasingly unaffordable: CHOICE
Richard Dinnen - Queensland Editor |
The consumer organisation, CHOICE, says an increasing number of Australians can’t afford to properly insure their homes for weather-related risks.
CHOICE said more properties aren’t covered for flood, fire, and cyclones, and a lack of affordable cover has flow-on effects across the economy when disasters occur.
Data from strategic analytics firm Finity shows that in the five years to April 2022, average quotes for combined home and contents insurance premiums rose by over 72%, an average increase of $1147 a year.
In Western Australia quotes, for home insurance have risen over 101%, and in Queensland, the most expensive state, quotes have risen by 66%.
The average home insurance quote in Queensland now stands at $3853 for a year of cover.
Dean Price, CHOICE policy adviser, said the data paints a bleak picture of the changing insurance market.
“What we are seeing is that people are forgoing particular types of insurance if they can’t afford it and leaving their property underinsured or uninsured.
“This obviously leaves people in a very vulnerable situation.
“This is going to be an ongoing problem and something that’s going to need the attention of the insurance industry and also most likely governments, who are the ones who will pick up the costs when people aren’t adequately insured.
“What we understand from climate scientists is that the extreme weather events are going to continue to increase in frequency and devastation.
“Action needs to be taken now, because it’s already an issue for a large number of people, and the number of people affected by this is likely going to grow.”
CHOICE quotes a recent report by the Climate Council and Climate Valuation that found one in 25 Australian properties would be uninsurable by 2030.
A property is said to be uninsurable when the cost of average annual damage exceeds one per cent of its value.
