The country’s Insurance Council has cautioned that damage could cost billions of dollars.
The Insurance Council of Australia (ICA) has cautioned Australian insurance companies, businesses and residents that the damage from Cyclone Debbie is extensive and will be costly. In fact, the ICA declared it a catastrophe.
There has yet to be a final estimate of what the damage total will be but previous ones have been in the billions.
Over 90 percent of the residents of North Queensland are covered by some form of insurance policy. The majority of home and contents policies sold by Australian insurance companies there include cyclone damage, said the ICA. The council declares a natural disaster to be catastrophic when its outcome leads to a massive number of insurance claims and when several insurers are involved.
Campbell Fuller, the ICA general manager of communications, said that Australian insurance companies are preparing themselves.
Fuller released a statement to help guide affected customers. “Once the cyclone has passed and it’s safe to do so, ring your insurer, find out what’s available to you under your policy and the insurer can then give you the best guidance on the next steps to take,” he said. “A building [that] looks perfectly fine from the outside or seems to have suffered only minor damage may have actually incurred hundreds of thousands of dollars of damage and that’s even for newer buildings,” he added.
Suncorp, a major insurance company in the country, has stated that it expects cyclone costs to be fully covered. The reason is that it is protected by reinsurance which covers it for anything from $250 million to $6.9 billion.
Analysts have stated that while Australian insurance companies may be affected by the large influx of claims, any harm to wider economic growth in the country is expected to be minimal. The timing of the storm at the tail end of the first quarter has assisted in that. “Any delays to production should be caught up over the June quarter,” said CommSec chief economist, Craig James. James went on to say that over the next quarter, repairs to damaged infrastructure and buildings will only assist the local economy.