Report calls for government-led bushfire insurance

Report calls for government-led bushfire insurance | Insurance Business

Report calls for government-led bushfire insurance

Thousands of homes in bushfire-prone areas in Australia might soon become uninsurable as climate change worsens. However, a new report suggests that a government-led insurance scheme might be the most ethical solution.

The Social Justice and the Future of Fire Insurance in Australia report predicts that over 445,000 Australian homes will become uninsurable within 30 years, with the number expected to jump to 718,000 by 2100.

“We can’t leave this to the market just as we can’t leave COVID-19 to the market. Doing this would introduce too many disadvantages and inequalities, particularly for already vulnerable people,” said Professor Jeremy Moss, a director of the Practical Justice Initiative at the University of New South Wales which compiled the report.

The report emphasised that entire areas might lose insurance coverage because of fire risks and that could result in lower property values.

Read more: NIBA calls for ‘fairer’ fire services funding

“That’s why we need to think of a different way of insuring bushfire risk. The aim of the study was to start a discussion and come up with a framework for developing a fair system of bushfire insurance,” Moss said.

Campbell Fuller, the head of communications and media relations at the Insurance Council of Australia (ICA), added: “The ICA believes other solutions would be fairer and more effective in ensuring the long-term sustainability of communities in high-risk areas and reducing premium pressures.

“The ultimate goal should be to protect at-risk communities through physical mitigation infrastructure and improved policy settings relating to building codes, risk-appropriate land use planning, and the removal of state taxes and levies that have a significant impact on insurance affordability.”