The Insurance Council of Australia (ICA) is urging Australian communities to “lower risks and take practical action” to reduce the impacts of extreme weather and prevent parts of the country from becoming uninsurable due to climate change.

The message comes a week after the Senate voted to increase disaster mitigation funding by $50 million a year – a move Campbell Fuller, head of communications and media relations at ICA said is a “positive sign governments are starting to understand the important role they play.”

Read more: Insurers welcome $50 million boost in mitigation funding

“No area of Australia should be uninsurable, provided governments invest appropriately in permanent mitigation and resilience measures to protect communities from known and projected risks, including the impact of climate change,” Fuller said.

In a recent statement, Fuller encouraged the use of credible, agreed, and understood methodologies to help property owners, communities, and governments avoid costly mistakes and maladaptation.

The ICA leader said extreme weather projections should be based on climate change models that are “agreed upon and understood by all relevant stakeholders,” to not “unnecessarily scare householders and businesses, disrupt communities, and lead to poor decisions and outcomes.”

Fuller also said “fee-based commercial climate change tools that aim to provide information about future risks must be based on transparent methods and data,” to “allow community members to understand relevant limitations in the projections and make more informed decisions.”

He added that the insurance industry is investing in the development of transparent risk tools for climate change, based on centuries of underwriting expertise and extreme weather knowledge.

“As APRA has highlighted recently, governments must invest in permanent mitigation and resilience measures to protect communities already at risk from extreme weather, whether exposed to cyclones, storms, floods, or bushfires,” Fuller said. “Governments, using credible and agreed methodologies, must also determine how best to ensure communities can be more resilient to the impacts of climate change. Managing and lowering the risks to communities through investments in mitigation, and helping them become more resilient, is essential in ensuring insurers can continue to provide risk transfer products to all Australians.”