Climate disasters making insurance affordable

ABC NEWS (Australia)

A new report says it has never been more difficult to obtain home insurance in Australia after a series of natural disasters in recent years. The Climate Council report says 80 suburbs across Australia are now deemed ‘critical risk zones’ and has urged authorities to work with insurance companies to find answers.

Transcript

00:00As Vicki and Jeff Woodhouse survey the block where their family home once stood, they think

00:07back in amazement to the scale of the floods that hit Shepparton in 2022.

00:13We did not think that the house would be inundated with water to the extent that it was.

00:18They were initially told by their insurance company they'd need to rebuild their property

00:22like for like, but they knew that would leave them unable to insure the new house.

00:27To me, logically, why would you refit our home at the current floor level, which is setting

00:35me up to flood again?

00:37Shepparton is the most at-risk suburb in Australia, with almost 90% of its properties considered

00:43uninsurable.

00:45What we do in Shepparton, how we solve this, can be a blueprint for how we're going to solve

00:51this in hundreds of suburbs around Australia.

00:53But if we don't solve it, it will also be a blueprint of what demise looks like.

01:01Climate risk analysis shows more than 80 suburbs around Australia are now critical risk zones,

01:07where more than 80% of properties are considered to be at high risk of climate-related damage.

01:13Getting insurance in Shepparton is now almost impossible.

01:16We're seeing $30,000 a year increases, which is completely unrealistic.

01:21But without it, there's no access to mortgage funds through the banks, a vicious cycle that's

01:27leaving residents high and dry, and the local council, outraged.

01:31They're not willing to engage with those community members because it doesn't allow them to generate

01:35more revenue.

01:36But experts say blaming the insurance companies doesn't solve the problem.

01:40Forcing the insurers to do things which are commercial suicide is not a solution.

01:45They want insurers, banks and the government to work together to future-proof flood-prone communities.

01:50If we are faced with flood events like we've experienced in 2022, it'll be those same

01:55seven, eight, nine hundred houses that will be impacted again.

01:58We want to make sure that they can build back better.

02:01Vicky and Jeff Woodhouse eventually negotiated a financial settlement and relocated.

02:06We decided that it was all too much to build a new home and it was time to move on.

02:12Drastic measures for a growing problem.

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