Some areas are being seen as higher risks for flooding, fires, and drought, among other perils.
Australia is now experiencing some of the most fierce and extreme weather and natural events that have ever been recorded, causing many homeowners insurance customers to ask themselves whether they should expect to pay higher premiums in order to compensate from the increasing risks.
The current summer in the country has been one of the most damaging single seasons on record.
Many of the areas in the country faced scorching temperatures throughout the summer that have led to massive forest fires and greatly dried out regions. Tropical Cyclone Oswald just struck New South Wales and Queensland, and brought extensive flooding along with it. This single event caused six deaths, as well as tens of thousands of isolated and displaced individuals. The country deployed the military to North East Australia in order to help in whatever way that they can.
Homeowners insurance companies are taking part in processing as many claims and helping however they are capable.
The types of natural disasters that have been experienced in Australia over the last few years are becoming increasingly unexpected and difficult to cover. Flooding, for instance, is highly unpredictable and coverage for it is challenging. Queensland was affected by flooding, in 2011, that was not dissimilar to the current issues that it is facing. At that time, the estimated cost of repairs and cleanup was AU$400 million.
In that year, the Natural Disaster Insurance Review was commissioned by the Australian Government, in order to take a deeper look at the type of homeowners insurance coverage that will be available to those who are in regions that are now known to be at the highest risk.
One issue that was faced by this review was the clear and formal definition of flooding, in order to make it possible to provide more understandable homeowners insurance terms. This task was created in order to help policyholders to know when they were able to make a claim, and what provisions were available to them if they were victims of flooding. What it concluded was that flooding was considered to be any land area that is usually dry but that becomes inundated by water. The hope is that this will provide enough clarity for the claims that are now being made in the latest round of flooding, the costs of which have already reached AU$50 million and that are expected to increase.