The 2022 floods in Queensland, New South Wales, Victoria, and Tasmania led to over 300,000 insurance claims, the highest for any natural disaster in Australia’s history, totalling over $7.7 billion of incurred costs. In total, flood events have accounted for more than 54 per cent of losses from declared insurance events in the last five years and is expected to increase with the effects of climate change.
Inquiry into insurer’s responses to major floods
The House of Representatives Standing Committee on Economics conducted a year-long investigation relating to insurers’ responses to the major 2022 floods, hearing from insurance CEOs, regulators, consumer advocates, and affected communities. The findings were outlined in the Flood failure to future fairness report.
Recommendations from the inquiry
The report includes 86 recommendations aimed at improving claims management, transparency, and long-term flood preparation and resilience. The recommendations focus on 3 key areas:
Policyholders: Emphasis on better treatment of policyholders, addressing issues like inconsistent decision-making, poor communication, and delays.
Pooling: Strengthen pooling mechanisms to manage distribution of premiums through tightening policy definitions and exploring intervention responsibilities for high-risk properties.
Preparation: Focus on improving flood preparation and resilience through property-level mitigation and community planning such as limiting lending for developments in areas at high risk of flooding.
PEXA & Land Insight: The link between flood risk and securing finance for a home
PEXA Group provides comprehensive data insights of property settlement trends in Australia. PEXA’s latest Cash Purchases report highlights a high proportion of residential property transactions funded with cash that were located in areas which had experienced recent flooding or are at high risk of future flooding.
“This highlights the need for future homebuyers to better educate themselves and undertake their own due diligence on environmental risk factors before buying a home.
Key considerations include checking for flood zones, bushfire risks and contamination risks. Understanding these environmental risks not only helps prevent unexpected costs but also provides peace of mind, ensuring a safer, more sustainable home purchase and securing of finance.”
- Tim Osborne
Co-Founder, Land Insight
The importance of data in decision making
Land Insight have curated a national database of flood modelling studies as part of our Environmental Reports, which can assist in identifying affected properties at a potential risk of flooding. It includes areas that might be subject to development and planning controls specified by differing modelled flood events such as the defined flood event (DFE) and probable maximum flood (PMF). Check out our blog on What is a probable maximum flood (PMF)?.
To ensure that you are making data driven decisions when identifying and assessing flood risk, access Land Insight’s range of solutions today.
For further information, please contact us.
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