30 January 2013 — The Greens have called for a permanent disaster fund, as insurers admit that many home owners are foregoing flood insurance because of the high cost of premiums.
Flood insurance premiums in Queensland are as high as $19,000 and in NSW as high as $24,000.
“To date, more than 3000 properties have been affected by flood waters in Brisbane, with 9800 insurance claims submitted in Queensland totalling $116 million and around 2,000 in NSW totalling $10 million,” according to a report in Wednesday’s Property Observer .
“According to Allianz figures, as a result of the unaffordable cost of flood cover, 98 per cent of NSW customers with a risk of flood of up to one in 49 years have opted out of cover, while the equivalent figure for Queensland is 95 per cent,” the report said.
“The average flood insurance premium offered by Allianz in Queensland is $8200 but can be as high as $19,000 based on the on the average home and contents sum insured of $385,000 in Queensland.
“In NSW, the average annual premium $4704 but can be as high as $24,000 based on the average home and contents sum insured of $388,500.
“These figures are for flood cover only.”
The Insurance Council of Australia website states that nearly four in five Australian household insurance policies contain flood insurance.
In its submission to the federal government’s Natural Disaster Insurance Review, commissioned following the 2011 Queensland floods, Allianz proposed a reinsurance-style pool as mechanism to make flood insurance affordable.
The federal government review did not recommend mandatory purchase of flood insurance, leaving it up to home owners in flood-at-risk regions to decide whether they wish to bear the risk.
Meanwhile The Australian Greens want a permanent disaster relief fund, not a one-off levy, to pay for Queensland’s flood crisis and similar events in the future.
“Greens leader Christine Milne said it is time for politicians to recognise that extreme weather events are here to stay and longer-term solutions are needed to address the problem,” it reports.
“The science tells us that climate change is causing and will cause more frequent and extreme weather events. If we are to be properly prepared for this changed world we will need an adequate fund to help people deal with the costs.
“Of course, in order to do this, both the Labor party and Tony Abbott need to grapple with Australia’s revenue crisis.
“Climate change is expensive, and the cost of not acting now will far outweigh the costs of acting.”
Read our story on planning and sea level rises in NSW – NSW coastal planning in storm of confusion