Nearly $1 billion paid to policyholders after 2022 floods

According to the Insurance Council of Australia (ICA), almost $1 billion has been paid to policyholders after one of the most costly flood events occured in Queensland and NSW earlier this year. 

The ICA has increased the estimated insured losses for the disaster by 28% to $4.3 billion.

The only Australian catastrophes to cost more were the 1999 Sydney hailstorm ($5.57 billion), the 1974 Cyclone Tracy ($5.04 billion), and the 1967 Cyclone Dinah ($4.69 billion) on a normalised loss basis.  

The ICA had previously estimated $3.4 billion, however due to claims progression and an increase in larger commercial claims, the bill estimate has dramatically increased. 

Across NSW and QLD, there have been 216,465 claims, and more than a fifth of them are already closed. 

ICA CEO Andrew Hall says the government will have a role to play in ensuring that Australians can access insurance for future catastrophes. 

“Keeping Australia insurable as extreme weather events worsen requires governments to invest in appropriate physical mitigation and adaptation strategies,” ICA CEO Andrew Hall said.

From February 22 to March 9, intense rainfall struck Maryborough in Queensland down to Grafton in NSW. Many areas received more than half their average annual rainfall in just a week. NSW’s Lismore suffered devastating flooding as the Wilsons River exceeded the former record set in 1954 by over two metres.

As Australia continues to experience extreme weather events all across the country, it’s important to make sure that you are keeping your home and assets protected. 

Contact the team at Business Insurance Consulting to learn more about your home and business insurance today! 

Credit: https://www.insurancenews.com.au/local/almost-1-billion-paid-to-flood-claimants-so-far

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Increased fire danger in NT after record dry levels

Dry conditions in northern parts of Australia will increase bushfire threat in the region in the coming months, reports the Australian Fire and Emergency Services Authorities Council (AFAC).

AFAC’s Season Bushfire Outlook for Winter 2022 reports that NT areas surrounding the Gulf, Victoria River and Katherine regions will face fire risks above expected levels from June to August. 

“Our colleagues in the NT are preparing the landscape and the community for the dry season, with some locations near or at record dry levels over the past three months, which increases their fire risk,” AFAC CEO Rob Webb said. 

The report forecasts a wet winter season, with above average rainfall expected in the ACT and parts of Queensland and NSW, reducing the likelihood of fire threats in those areas. 

“We have seen significant rainfall this year for much of the country, and are expecting above average rain to continue through winter,” Mr Webb said. 

However, he warns that the decreased threat poses an additional risk for traditional fire seasons later in 2022.

“While this reduces fire potential for this season, it will increase grass and fuel as we move into spring and summer. Agencies will continue to monitor local conditions and manage risks accordingly.” 

AFAC warns that deadly fires could still occur in normal fire risk zones, and suggests that all Australians remain vigilant to fire threats. 

With the devastating floods that affected Queelsnad and NSW earlier this year, it’s even more poignant that Australians are taking measures to protect their homes and businesses. 

While the Government needs to be pushed to take action to ensure that there are proper mitigation measures, Australians need to ensure they are insured against extreme weather events. 

If you need help discussing your business or home insurance options, you can talk to the team at Business Insurance Consulting to explore your options today!

Credit: https://www.insurancenews.com.au/local/record-dry-levels-increase-fire-danger-in-nt

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The Benefits of Using Insurance Brokers

A recent podcast series hosted by Insurance News MD Andrew Silcox discussed the benefits of using brokers, rather than buying insurance directly. 

The podcast, Insurance with INsight, is produced by Insurance News in partnership with Vero, and discusses the results of the latest Vero SME Index. 

Each year the Vero SME Index measures the effectiveness of insurance and brokers who work with small to medium-sized businesses. 

The podcast considers statistics from the Index that show broker clients are far more likely to be satisfied with the claims process than those who buy insurance direct. 

This episode features contributions from Vero’s National Manager Commercial Property Claims Kira Pellicano and Gallagher Head of Claims Adam Squire.

The Index reveals that 63% of broker clients are satisfied with the result of their claims, compared to only 42% of direct buyers. 

“99% of the problems that we have in claims are because communication has failed,” Mr Squire says.

“If a client ever rings me and says, ‘I don’t know what’s going on with my claim’, we as an industry have failed. It’s as simple as that.”

Ms Pellicano says SMEs that tap into broker expertise have access to crucial support. 

“The added benefit is then when something does go wrong, you’re not on your own and you actually have support of an insurance professional through that claims process.” 

You can listen to the episode recording here. 

Using an insurance broker can be especially beneficial for businesses, as insurance can be complicated. Having someone who understands the details of a policy can help you better understand what level of cover you may need, and avoid certain errors in claims. 

Need help with your business or home insurance? Get in touch with the team at Business Insurance Consulting today for all your insurance needs. 

Credit: https://www.insurancenews.com.au/daily/sme-claims-podcast-highlights-benefits-of-using-brokers


Is Australia becoming uninsurable?

Earlier this year Queensland and NSW experienced extreme flooding, leaving many homes with significant damage. 

While extreme weather events are not a new phenomenon in Australia, the increased severity and frequency of them has been cause for major concern. 

A study released by the Climate Council says insurers are raising premiums to cover the increased cost of claims and reinsurance as the threat of extreme weather events grows, with the risk set to worsen unless Canberra starts acting swiftly to phase out burning coal and other fossil fuels. 

According to the report, Australia is now facing the prospect of becoming an “uninsurable nation”, with more than half a million homes (1 in 25 properties) forced to go without insurance cover in 8 years time because of climate change. 

“Climate change is creating an insurability crisis in Australia due to the worsening extreme weather and sky-rocketing insurance premiums,” the report, Uninsurable Nation: Australia’s Most Climate-Vulnerable Places, says. 

The report states that insurance will become increasingly unaffordable in major parts of the country, and there is also a possibility that insurers could decide that offering policies in high-risk areas is not viable. 

“We have a number of places in Australia where people are not insuring their homes because of cost,” Climate Council CEO Amanda McKenzie says. 

“So that means that those homes are effectively uninsurable.”

She further elaborates that the recent floods and the Black Summer bushfires are a “massive red flag” for the country. 

“Scientists have been saying for decades Australia is highly vulnerable to climate change risks and now we’re seeing it play out before our eyes,” Ms McKenzie said. 

According to the recent Climate Council report, NSW and Queensland account for seven of the top 10 list of federal electorates that are most vulnerable to climate change-fuelled extreme weather events such as floods and bushfires. 

The report says that about 15% of properties (165,646), or about one in every seven properties in the top 10 list will be uninsurable this decade.

These properties have projected annual damage costs equivalent to 1% or more of the property replacement cost, and are referred to as uninsurable, the report says. 

“Whilst policies might still be available, premiums are expected to become too expensive for people to afford,” it explains.

ICA has responded to the Climate Council report, with a spokesman saying that although there are some locations where there are affordability and availability concerns, there is no area of Australia that is uninsurable at present. 

“Insurance prices risk, and that means that for those in flood-prone or cyclone-prone locations, cover can be costly,” the spokesman said. 

ICA CEO Andrew Hall says that while no area is uninsurable, the question should more so be focussed on what needs to be done in these extremely high risk areas.  

“In some cases we have seen, particularly in these most recent floods, homes that are flooded three times in 10 years and so the question has to be asked ‘when you’ve got homes that are in harm’s way and are often being damaged catastrophically like this, what do we need to do’,” he said. 

Mr Hall says Australia needs to look at adaptation measures and mitigation investments to improve resilience and existing building standards. 

“We do have a problem in this country that we have got to simply address and that is more money has to go upfront to protect homes rather than in the clean-up.” he says. 

Mr Hall says an “extreme outcome” could involve relocating homes, buying the land and turning it into recreational or environmental areas. However, he adds on that people have to be given options if they choose to stay where they are. 

This “uninsurable nation” tagline has raised some debate within the industry. 

Many have said that this is an alarmist interpretation, but the report insists this is a make or break time for Australia’s insurability crisis. 

But one thing that cannot, or should not, be debated is that action must be taken on making this country more resilient to natural disasters.

If you have any questions or concerns about your home or business insurance, you can reach out to the friendly and knowledgeable team at Business Insurance Consulting! 

Source: https://www.insurancenews.com.au/analysis/uninsurable-nation-maybe-maybe-not-but-action-needed-either-way