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New data from the Insurance Council of Australia (ICA) shows the recent natural disasters in Southeast QLD and NSW will cost $3.35 billion in insured losses, making it the most expensive Australian flooding event of all-time.
The industry body determined the figure by using actual costs from 197,000 claims across both states, of which the majority (86 per cent) were property claims.
According to the ICA, the rise in costs compared to previous floods was driven by higher losses in personal contents and commercial property classes. To date, 11 per cent of claims have been closed and approximately $580 million has been paid to policyholders.
ICA CEO Andrew Hall is calling on both the state and federal government to commit to “a significant increase in investment in programs” in order to “lessen the impact of future events.”
“We knew that this year’s east coast flooding was one of the biggest floods in our history, but these updated numbers show that in monetary terms it was in fact the biggest ever,” Hall said.
“We need to plan better so we no longer build homes in harm’s way, make buildings more resilient to the impacts of extreme weather, and remove state insurance taxes which only discourage adequate insurance cover.”
The storm and flooding disasters were also reported to be the fifth most costly natural disaster events ever, trailing behind the following (which have been normalised to 2017 values):
- $5.57 billion: Eastern Sydney Hailstorm, 1999
- $5.04 billion: Cyclone Tracey, 1974
- $4.69 billion: Cyclone Dinah, 1967
- $4.24 billion: Newcastle Earthquake, 1989
In its most recent report titled Building a more resilient Australia, the ICA called on the federal government to better protect households and communities from extreme weather events by doubling resilience funding to $200 million per year over five years.
Other recommendations included amending national building codes, establishing a national natural peril data centre and reviewing tort law - specifically its impact on the affordability and availability of insurance for small to medium enterprises (SMEs).
The news coincides with the release of the Climate Council's latest report, which estimates one in 25 Australian properties will be uninsurable by 2030 due to increased flooding and bushfires caused by climate change.
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