Most Australian homeowners outside flood-prone areas are unwilling to pay higher insurance premiums to improve affordability for those in flood zones, according to a survey of 1,222 homeowners commissioned by insurer Youi.
The survey, conducted by research firm Lightspeed between September 2 and 7, 2026, found that among respondents who do not believe they own a property exposed to flood risk, two-thirds (66%) said they are unwilling or unsure about paying more on their premium to reduce costs for flood-affected households. Of the one-third who indicated some willingness, most said they would contribute less than $300 extra per year.
The finding carries weight for brokers managing renewal conversations in disaster-exposed regions. Cross-subsidisation through a broad premium levy has been discussed as one policy option, but this data points to limited public appetite for the approach.
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The survey found that 40% of respondents selected limiting development in flood-prone areas as the top priority for reducing the impacts of flooding. Building flood defences ranked second at 20%. Only one in 10 selected educating homeowners to make their properties more resilient as the most important action.
Nearly eight in 10 respondents (78%) supported either prohibiting developments in high-risk areas (46%) or allowing them only where flood risk can be substantially reduced through mitigation (32%).
Those results sit alongside a broader push from the insurance industry for planning reform. The Insurance Council of Australia (ICA) has argued that allowing new housing in high-risk zones will not solve the housing shortage, citing more than 214,000 Queensland home claims processed since 2022 in its October 2026 submission on Queensland’s planning overhaul.
National Insurance Brokers Association (NIBA) president Nick Cook said in April 2026 that the industry cannot afford to wait for the next disaster.
“The answer cannot be to wait until after the next disaster and rebuild again at greater cost. We need coordinated action that reduces risk before disaster strikes,” Cook said.
The Youi research also revealed a gap between perception and reality. While 37% of respondents said they own a property exposed to flood risk, only 8% identified that more than two million Australian homes face some level of flood exposure. More than half (53%) estimated fewer than one million homes are at risk.
That awareness gap has a measurable insurance consequence. According to the ICA’s 2024-25 Insurance Catastrophe Resilience Report, 77% of the 242,000 homes facing severe to extreme flood risk do not have flood cover.
The Australian Prudential Regulation Authority’s (APRA) March 2026 Insurance Climate Vulnerability Assessment (CVA) found that about one in seven Australian households are currently uninsured, a figure projected to rise to one in four by 2050. Home insurance premiums grew at an average of 7.2% annually between 2010 and 2025, compared with 3.1% wage growth over the same period.
NIBA CEO Richard Klipin said APRA’s findings reflect what brokers are already seeing.
“APRA’s report underscores what brokers have been experiencing on the ground. Climate risk is already putting pressure on affordability, increasing underinsurance,” Klipin said.
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Youi chief executive officer Nathaniel Simpson said flooding is one of Australia’s most frequent and costly natural disasters.
“Building a fairer, more resilient future requires a shared effort from insurers, governments, industry and communities. We all have a role to play in helping Australians better understand their risk, take practical steps to reduce their exposure and prepare for the impacts of flooding,” Simpson said.
“The more informed we are, the better equipped we’ll be to protect not only Australian homes, livelihoods and communities, but also save lives,” he said.
Simpson also addressed the policy dimension.
“Behind every discussion about flood risk is a person, a family, a business or a home. The decisions that shape that risk, where we build, how we build and how we protect communities, extend well beyond insurance. Good policy must make insurance risk visible, not mask it. We need industry and government to act in concert in a sustainable manner,” he said.
The Australian Competition and Consumer Commission’s (ACCC) fifth insurance monitoring report, released in June 2026, found that the cyclone reinsurance pool reduced home insurance premiums by about 11% in medium to high-risk areas in the first year after insurers joined the pool, while premiums in nil-risk areas rose about 6% over the same period.
That dynamic, where risk reduction in one area creates cost pressure elsewhere, mirrors the cross-subsidisation resistance the Youi survey captures. For brokers, the data reinforces what the market is already signalling: the path to affordability runs through mitigation and planning reform, not broad-based premium levies. Client conversations in high-risk areas are shifting from whether cover is available to what the homeowner has done to reduce their exposure.
The Youi survey data was collected from homeowners aged 18 and above across all Australian states and territories. Results have not been independently verified by Youi and may not be representative of the general population.
