Consumer Struggles and Insurance Market Failures Highlighted in New Report

A joint research project report, ‘Weathering the Storm: Insurance in a changing climate’, released this Tuesday has highlighted the critical state of insurance as premiums once more rise for 87% of Australians. Released by CHOICE in partnership with the Climate Council, Financial Counselling Australia (FCA), Financial Rights Legal Centre, and the NSW Tenants’ Union the report reveals that two in five Australians who responded to the national survey have been impacted by extreme weather events in the past five years, with many still suffering psychologically and financially.

The Federal Government has recently announced an inquiry into insurer response to the 2022 floods, but with many insurance premiums rising, the absence of trustworthy and publicly available information on potential risks to the home, and increasing and increasingly devastating extreme weather events consumer groups are calling for more to be done.

Given the harsh, and for many people, devastating reality of the situation CHOICE and partner advocacy groups are calling in governments to take action, including:

  • standardising insurance definitions and requiring insurers to proactively warn customers about underinsurance
  • conducting an independent review of the affordability of home insurance
  • trialling home insurance subsidies in communities where insurance is unaffordable
  • providing funding to help people on low incomes make their homes more resilient
  • creating a database that provides clear information on current and future climate risks to people’s homes
  • adopting a national approach to planning for relocation of communities at high risk of natural disasters.
From CHOICE’s article (8/08/2023) “CHOICE report: Extreme weather putting home insurance out of reach”, available by clicking here.

Extreme weather can have devastating and potentially lethal consequences, but more can be done in preventative measures and ensuring the already emotionally draining cleanup goes as fairly and with as little financial cost as possible.

For more information please visit the CHOICE or FCA articles linked below. You can also open a pdf and read the full report by clicking here.