Australia underinsured against bushfires

The New South Wales Rural Fire Service, South Australian Country Fire Service and Understandinsurance are encouraging households to assess their bushfire exposure this disaster season.

Newly released data from the Insurance Council of Australia (ICA) shows 1.75 million blocks of land nationwide may be impacted by bushfires.

They include:
• Tasmania – 64 per cent of blocks
• Western Australia – 34 per cent
• Victoria – 24 per cent
• New South Wales – 22 per cent
• South Australia – 19 per cent

The warning comes as the Bushfire and Natural Hazards Cooperative Research Centre (BNHCRC) upgraded its seasonal bushfire outlook for the second time due to increased risk across southern and eastern Australia.

While factors such as how close a home is to bushland and the slope of the land can affect a home’s physical vulnerability to bushfires, they also impact on insurance needs by influencing rebuilding costs.

Understand Insurance spokesman Campbell Fuller says changes to national building standards for homes on bushfire-prone land have increased the risk of underinsurance for some households.
“State and local governments have introduced tougher building standards over recent years to make homes in bushfire-prone areas more resilient. This is a positive step, but it can substantially raise rebuilding costs, especially for properties built before 2009,” Mr Fuller says.

“Households that aren’t aware of this may choose to insure their property for a sum that’s too low to fully rebuild their home or replace its contents.
“After a bushfire or other disaster, they are then forced to borrow money, or sacrifice size and features to rebuild their home on a smaller budget. In some cases, they simply can’t afford to rebuild.”

Mr Fuller says households should contact their local council for information about the bushfire zoning of their property.