Some properties ‘uninsurable’: Price hikes ahead as Queensland takes the heat
03 September 2021
Published by https://www.smh.com.au/
AUSTRALIA – Queenslanders face the bulk of Australia’s insurance premium hikes because of the state’s susceptibility to a warming climate, bushfires and localised flooding.
Six regions – including the Gold Coast, the Sunshine Coast, Brisbane and Moreton Bay- are among the top 10 Australian locations for escalating insurance costs linked to fires, soil erosion, beach erosion and inundation from rivers and oceans.
The rising insurance costs scenario is contained in Infrastructure Australia’s 2021 Australian Infrastructure Plan released on Friday.
The plan ranks probable insurance premium rises in 544 local government levels in terms of the number and value of properties at risk of damage from localised flooding, ocean and river inundation and mud and soil flow linked to a warming climate.
The research shows homeowners in the Gold Coast, Brisbane, Sunshine Coast, Moreton Bay, Fraser Coast and Mackay will pay a higher risk premium as part of their property insurance.
“That risk premium is because of the impact of climate risk,” Infrastructure Australia director of policy and research Peter Colacino said.
“As the climate changes, it is south-east Queensland that is going to be increasingly effected, both in increased frequency and increased severity of extreme events.”
The report ranks both the numbers of properties that will be affected by the changing climate and the proportion of properties in the area that will be affected.
“We have seen those impacts on the Gold Coast in recent years,” Mr Colacino said.
“I’m thinking of Burleigh and the significant impacts there all the way down to Coolangatta,” he said.
“Obviously there is the significant costs of sand dredging to replenish those beaches there.
“We have seen these impacts as part of the natural character of these regions.
“The impact of changing climate means increased severity of extreme weather events, storms and winds will mean those risks grow.
“The result of that will be increased insurance costs.
“In extreme cases, some properties could become uninsurable.”
Mr Colacino said the table measured more than the rare risks of coastal homes collapsing into the ocean because of beach erosion.
“Examples could be riverine flooding – so people living in canals on the Gold Coast and Sunshine Coast, for example, which is very common – could have water from the canals coming into their properties.
“It could be issues with subsidence arising from soils being sodden. It could just be the impacts of high winds pulling parts of buildings free, creating debris.”
Earlier this year the federal government promised a $10 billion fund to reduce insurance premiums in north Queensland after a lengthy review into the impacts of repeated cyclones.
At this point only $2.6 million for the reinsurance scheme has been set aside in the federal budget.
In July 2021 the Queensland government opened a scheme where north Queensland councils could apply for money from a $10 million fund to cover rising insurance costs.
The Insurance Council of Australia found that in Townsville and Cairns, reducing flood risk through permanent mitigation measures could reduce insurance premiums by up to 21 per cent.
In 2020 the insurance council sponsored a two-year study into the impacts of high winds on coastal Queensland, with six local governments and the Queensland Fire and Emergency Services.
It will report to government in 2022.
The insurance council of Australia has proposed new housing designs to reduce the impacts of changing climate.
