Climate change pushes up insurance; families not insuring their properties
FOR IMMEDIATE RELEASE
3 October 2024
Senate inquiry testimony reveals climate change sending insurance premiums up
Evidence of families waiting years for insurance payouts following extreme weather
“You can’t put a fire out by pouring petrol on it”: We need deep emissions reduction this decade to protect Australian families
It’s official: climate change and the extreme weather it brings are pushing insurance costs through the roof for Australian families.
The Senate Inquiry Into The Impact Of Climate Risk On Insurance Premiums And Availability has been told some families are waiting years for insurance payouts following extreme weather events driven by climate, while others are being offered payouts which do not cover the cost of rebuilding.
Bushfire Survivors for Climate Action CEO Serena Joyner told the inquiry that many families already could not insure their properties for what they’re worth - and some could not afford to insure their properties at all.
“What people are looking at doing is reducing the amount they’re insured, and these are those who can still afford to take out that insurance,” Ms Joyner said.
“People are having to make decisions that will end up reducing what they’re insured for.”
Speaking today, Ms Joyner said Australia needed to unite to reduce emissions this decade.
“Australians are used to dealing with disasters, but it’s just not fair to expect them to keep copping these escalating costs.
“We need deep emissions reduction this decade to protect Australian families from spiralling insurance costs - and the damage caused by worsening floods, fire and drought,” Ms Joyner said.
“You can’t put a fire out by pouring petrol on it.”
Jan Harris lost her home in Tathra in the March 2018 Reedy Swamp Fire. “I feel increasingly nervous about the rising cost of insurance. Our premium has nearly doubled and I doubt we could afford to rebuild and replace the contents we have. The contents we have now are of a lesser standard than what we lost, as we could not afford to rebuild to the required standard and have what we lost replaced. It is depressing knowing that what we own now is so much less likely to be destroyed in a fire, as it’s built to Bushfire Attack Level 40, but if premiums keep going up as retirees we may not be financially able to insure.”
Other quotes from the inquiry:
Financial Rights Legal Centre Senior Policy and Communications Officer Julia Davis:
“The problem of insurance in a changing climate has reached a point where the market is not going to solve these problems. It is time for government intervention.
“The repercussions of these events extend beyond financial strain for consumers. The consequences have been deeply personal with individuals facing emotional stress, strained relationships and trauma."
Ms Davis also said managing insurance claims was “nothing short of retraumatising” for many consumers.
Financial Counsellors Australia National Coordinator for Disaster Recovery, Vicki Staff:
“We’ve seen people being quoted up over $60,000 per year,” (for insurance).
“People are now having to find an insurance product that doesn’t fully cover them for the natural perils they are the most at risk of.”
Insurance Council of Australia, Chief Operating Officer Kylie McFarlane:
“The widening gap between those who can afford insurance and those who can not, especially in areas vulnerable to extreme weather risk, is an issue that we need to address collectively.
“Insurance prices risk, and the most effective way to reduce pressure on premiums and reduce the protection gap is to mitigate or eliminate those risks.
“Industry and governments need to continue to tackle the underlying driver of worsening extreme weather, climate change, by maintaining a focus on achieving net zero by 2050 with a focus on driving down emissions this decade.
“High inflation, worsening extreme weather events, expansion of development in high-risk areas and growing asset values are putting upward pressure on the affordability of insurance.”
“In 2022 alone insurers paid out over $7bn in extreme weather claims from 302,000 claims.”
ENDS
Media contacts:
Danielle Veldre
Climate Media Centre
+ 61 408972997
Jan Harris, a founding member and board member of Bushfire Survivors for Climate Action, stands on the ruins of her Tarthra home which was lost in the 2018 Reedy Swamp fire.