Businesses in Halls Gap, located near Victoria’s Grampians/Gariwerd National Park, are facing significant hurdles in obtaining bushfire insurance as providers scale back coverage in high-risk areas.
The lack of insurance options has raised concerns among local business owners, who say the situation is threatening the region’s tourism-reliant economy.
Asip Memishi, the owner of the Halls Gap Hotel, purchased the business in late 2023, unaware of how difficult it would be to secure fire insurance.
When bushfires broke out near the town during the summer of 2023-24, Memishi had to defend the property himself using hoses.
“My kids were ringing me every five minutes saying, ‘Come home dad’ … it was a bit hard to leave the place,” he said, as reported by ABC. “I just don't know what's going to happen [if it burns].”
Despite paying an annual insurance premium of $55,000, Memishi claimed that his policy excludes bushfire-related losses. This limitation has complicated his ability to sell the business, forcing him to reconsider his long-term plans.
Other business owners in the region are grappling with similar challenges.
Alan Wang, who operates accommodation in Halls Gap, said insurance premiums for his property exceed $20,000 annually.
Meanwhile, tourism operator Adrian Manikas sought coverage from an overseas insurer after receiving no quotes from Australian companies.
“There was not a single insurer in Australia that would offer even a conversation to provide a quote,” he said, as reported by ABC.
He added that while he managed to secure a policy that includes business continuation coverage, it excludes bushfire risks in key areas.
David Hosking, director of Grampians Insurance Brokers, said the availability of bushfire insurance has declined sharply over the past decade. Insurers are increasingly unwilling to assess individual properties, opting instead to exclude entire regions from coverage.
He cited a recent case involving a newly constructed building designed with fire-resistant materials and equipped with extensive fire safety measures. Despite the property’s minimal risk profile, no insurer offered coverage.
“The chances of it burning down are virtually zero,” Hosking told ABC. “We got no one that would be prepared to insure it. Not one.”
He suggested that insurers need to collaborate, sharing the risk across multiple providers to make coverage more viable in high-risk areas.
The insurance crisis has prompted warnings from local and federal leaders about the economic impact on towns like Halls Gap, which depend heavily on tourism.
Federal Mallee MP Anne Webster expressed concern that the region’s businesses could become unsustainable if the situation persists.
Opposition Leader Peter Dutton also highlighted the broader implications, noting that businesses unable to secure insurance may struggle to access financing.
“Banks won’t lend money to a business that can’t insure the asset that underpins the loan that’s been made,” he said, as reported by ABC. “And in that circumstance, those people lose their business. If they can’t get financed, they sack the staff, they move on. And that has a spiralling effect in a community like this.”
Meanwhile, Federal Financial Services Minister Stephen Jones outlined the government’s efforts to address the issue, including investments in disaster mitigation through the Disaster Ready Fund and the establishment of an insurance affordability taskforce.
The Insurance Council of Australia (ICA) has emphasised the need for stronger disaster resilience measures to address climate-related risks.
Drawing on lessons from the recent Los Angeles wildfires, the ICA pointed to the growing frequency and severity of extreme weather events as a global challenge for insurers.
To address the issue, the ICA has called for greater investment in risk reduction initiatives, such as reinforcing properties against natural disasters, improving land-use planning, and developing protective infrastructure like firebreaks.
The council also launched an “Extreme Weather and Disaster Response Planning Guide” to help insurers improve their response to large-scale events. The guide encourages stress testing, scenario planning, and transparent communication with stakeholders.
Without significant efforts to reduce risks, the ICA warned, communities in high-risk areas will continue to face rising premiums and shrinking coverage options.