Insurance companies may stop insuring flood and bushfire-prone areas

Insurance companies may stop insuring flood and bushfire-prone areas

04 February 2013

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Australia — I want to have a chat about insurance.

Every time there is a natural disaster in this country, whether it be a flood in Queensland or New South Wales, a bushfire down here in Victoria, we always get this lament from people that they’re devastated.

Of course they have a right to be devastated, but many of them add to their devastation by saying ‘I don’t have insurance.’

I’ve never understood people who don’t get insurance. The idea that you’d buy a property and not insure it against acts of God, if you want to call them that, seems absolutely ridiculous to me. You’ve always got to hope for the best and plan for the worst and that’s what insurance is all about.

But every time we have one of these natural disasters, we usually find a large proportion of people are either under-insured or not insured at all.

To make it worse, several of Australia’s largest insurance companies are contemplating whether to offer insurance in certain areas. They are exploring where the floods in Queensland typically go and what towns in Victoria are prone to bushfires.

I reckon if you can’t get insurance in your area anymore, you’re faced with a very stark choice: Do you stay with the prospect of having no insurance and therefore being completely exposed to another bushfire or flood, or do you go and abandon the place where you’ve always lived?


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