Insurance cost for floods and storms hits $12.3 billion since January 2020

Insurance cost for floods and storms hits $12.3 billion since January 2020

November floods in Eugowra, NSW. Photo: NSW SES, via Facebook.

With the February-March floods in Southeast QLD and NSW now classed as the most expensive natural disaster in the nation's history at a cost of $5.65 billion, data released today shows the total insurance bill from disastrous wet weather has topped $12.3 billion since the start of 2020.

Every eastern state has been significantly impacted by flooding over the last three years, while South Australia and Western Australia have been hit by storms and cyclone activity over that period.  

The Insurance Council of Australia (ICA) reports 788,000 claims related to floods and storms declared Insurance Catastrophes or Significant Events have been received by insurers since January 2020, meaning one in 25 adult Australians has made such a claim in that period.

"Each one of the 788,000 wild and wet weather claims lodged with insurers over the past three years represents a significant disruption to an Australian homeowner, tenant, landlord, business owner, primary producer or motor vehicle owner," ICA CEO Andrew Hall said.

"The fact that one in 25 of us has had to lodge an insurance claim because of this extreme weather is very sobering.  

ICA notes 237,000 claims were lodged in relation to the February-March floods in QLD and NSW, with the upgraded cost surpassing the 1999 Sydney hailstorm. 

In terms of other events in 2022, the mid-October storms and floods that cut across Tasmania, Victoria and New South Wales have generated more than 17,200 claims with estimated insured losses of $477 million. The July severe weather that inundated parts of western Sydney and surrounds has resulted in almost 22,000 claims at a cost of $244 million. 

An estimate is still being determined for the impact of floods in the Central West of New South Wales, where nearly 3,200 claims have been lodged. 

"We must not ignore what this data is telling us to do – invest in community-level mitigation, home retrofits, home buybacks in the most extreme cases, and better early warning systems," Hall said.

"We also need to stop building homes and in harms’ way and make new homes stronger.  

"While these figures show the massive impact of extreme weather events, they also show how hundreds of thousands of Australians have been helped back on their feet by their insurer."

Representing almost half the cost of floods and storms over three years, the February-March event has so far led to the pay-out of $3.54 billion from insurers, representing the closing of 69 per cent of claims from the disaster.

"Given the scale of this year’s flooding in northern New South Wales and south-east Queensland it’s pleasing that more than two thirds of claims from this event are now closed, and insurers are working around the clock to close out the remainder," Hall said.

Other very costly events over the timeframe include four major events over the two preceding years in South East QLD with total costs estimated at $3.27 billion, with one of those events also including NSW. Severe storms in South Australia and Victoria in 2021 cost $875 million, a hailstorm in Rockhampton in 2020 cost $503 million, Tropical Cyclone Seroja in WA cost $400 million, and severe flooding and storms in Victoria last year cost $313 million.

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