A new report puts Australia’s coastal sea level rise damage bill at $855 billion by 2100. For insurance professionals, the more pressing number comes from a document published six months earlier: The Australian Prudential Regulation Authority’s (APRA) own modelling showing one in four Australian households could be uninsured by 2050.
Read together, the two reports describe a protection gap that is already widening and will accelerate as sea levels rise.
The Climate Council published the $855 billion figure on September 10, 2026. The report, based on research by University of Melbourne professor Tom Kompas, models an intermediate emissions scenario – not a worst case – in which global emissions peak around 2040, producing approximately 55 centimetres of average global sea level rise and 2.7 degrees of average warming by century’s end. It is the first nationwide tally of economic losses from sea level rise.
Residential property insurance in Australia explicitly excludes damage caused by “actions of the sea” – storm surge, coastal erosion, and tidal inundation. The Climate Council warns the protection gap will widen as coastal flooding intensifies, and that costs are "unlikely to be shared equitably."
That assessment aligns with findings from APRA’s Insurance Climate Vulnerability Assessment (CVA), published in March 2026. Working with Australia’s five largest general insurers – Allianz, Hollard, IAG, QBE, and Suncorp – APRA found that around 15% of Australian households are currently estimated to be uninsured. Under both of its modelled climate scenarios, that figure could reach around 25% by 2050 – an additional one million households without protection.
Between 2010 and 2025, Australian home insurance premiums rose by an annual average of 7.2%, while wages grew by 3.1% annually, according to APRA. The gap widens most in regions that already have lower protection levels, particularly regional and rural Australia. NSW and Queensland together account for approximately 60% of uninsured homes nationally.
A separate figure from APRA’s report – sourced from the Insurance Council of Australia (ICA) – makes the flood cover shortfall concrete: 77% of homes facing severe to extreme flood risk do not have flood insurance today.
APRA’s modelling excluded strata properties because strata schemes are legally required in all states and territories to maintain building insurance over common property.
But mandatory cover does not resolve all exposure. Flood cover in strata policies is not automatic – it must be expressly selected and noted on the policy schedule. Individual lot owners remain separately responsible for their own contents and internal fixtures and often face the same “actions of the sea” exclusions as freestanding homes.
For brokers with strata books in coastal areas, the gap between mandatory building cover and actual flood or sea-action cover warrants review at each renewal.
The Climate Council’s state-by-state data maps where coastal risk is concentrated. Western Australia faces the largest projected losses at $230.5 billion, followed by Queensland at $214.5 billion, Victoria at $167 billion, and NSW at $150.7 billion.
By property count, Queensland leads with 93,157 at-risk properties, followed by NSW at 71,210 and Western Australia at 51,366. The Gold Coast alone faces $84.4 billion in projected economic losses – the most exposed urban area in the country.
ABC News reported that Griffith University researcher Johanna Nalau said insurance premiums were already rising “quite heavily in some coastal areas,” and that recovery from Cyclone Alfred’s coastal erosion damage remained ongoing at the time of publication.
The Climate Council data sits alongside a market already absorbing significant losses. The ICA’s Catastrophe Resilience Report 2025-26 recorded $3.98 billion in insured losses across seven declared events for the 2025-26 financial year, up from approximately $2.2 billion across three events the prior year. Queensland accounted for 60% of all catastrophe claims between 2022 and 2026.
Construction costs have added further pressure. The ICA found the Cordell Construction Cost Index rose approximately 30% nationally over the five years to 2026, against CPI growth of around 24%. Roof tiles alone rose 77% – among the components most commonly damaged by coastal storms and hail. For brokers reviewing coastal books, that figure has a direct consequence: clients who have not updated sums insured may already be underinsured before sea level risk enters the conversation.
The Australian Competition and Consumer Commission’s (ACCC) insurance monitoring report from July 2025 found that despite the cyclone reinsurance pool delivering median premium reductions in high-risk areas including Cairns and Mackay, no new insurers had entered northern Australian markets since the pool’s commencement, and availability had remained “relatively unchanged.”
The Climate Council notes that 14 centimetres of sea level rise is already locked in for Australia by 2050, regardless of future emissions cuts. Scientists cited in the report estimate that every 10 centimetres of sea level rise triples the frequency of once-in-a-century flood events.
In Sydney, minor coastal flooding has already risen from 1.6 days per year in 1914 to 7.8 days. Under a high-emissions scenario, tidal flooding alone – without any storms – would occur weekly by 2050 and daily by 2100.
More frequent flooding affects not just residential property but business interruption, strata, contents, and infrastructure – all lines where the “actions of the sea” exclusion applies and where the gap between economic and insured losses widens over time.
APRA’s vulnerability assessment flags the risk to bank mortgage portfolios as the protection gap grows and calls for coordinated action across government, industry, and the community – including risk-based land-use planning, stronger building standards, and sustained resilience investment.
The ICA has separately called for a $30.15 billion Flood Defence Fund over 10 years, indexed Disaster Ready Fund contributions, and reform of state insurance taxes and levies that currently add 20% to 40% to premium costs.
The Climate Council puts the stakes plainly: “The decisions made by governments and industry over coming years will determine how much worse things get.”
For brokers, the immediate question is not whether the risk landscape is shifting. It is whether the next renewal conversation addresses what the Climate Council’s $855 billion figure makes unavoidable – that the coastline their clients are insuring already behaves differently from the one those policies were written to protect.
