Flood insurance continues to come under the media spotlight amid the recent New South Wales (NSW) floods, with ABC news highlighting the case of a homeowner struggling to pay for the repair of his flood-damaged home.
Homeowner Joe Wilkinson is facing financial stress after his dream home at North Haven, NSW mid-north coast, was ruined by floodwater.
On buying his dream home, Wilkinson told ABC: “We borrowed some money from parents and in-laws to get a deposit together, and it was just about manageable, the price they were asking, without breaking the bank — and we finally settled a month and a half ago.
“There [are] a lot of old fixtures in here, and they absorbed a lot of water and just disintegrated in a couple of days.”
Wilkinson decided against paying $13,000 for flood insurance after making such a big purchase. However, he now regrets the decision as the recent floods have left him in financial trouble.
“It [flood insurance] was too expensive at the time,” he said, as reported by ABC. “It just wasn't feasible, and when you decide something like that, you don't think a month down the line you're going to be inundated with water.”
Wilkinson is not alone in his struggles, with Allianz revealing that 95% of its customers in NSW have decided to ditch flood insurance.
The Australian Competition and Consumer Commission (ACCC) also found that premiums in cyclone- and flood-prone areas in northern Australia increased by 178% over the past 10 years.
“We know that there are real reasons for more expensive insurance premiums in northern Australia. The risk of extreme weather is higher, and it can be costly for insurers to service these regions,” said ACCC Deputy Chair Delia Rickard.
Emergency Management Minister David Littleproud said the government was committed to increasing funding for mitigation in hopes that insurers keep their promises in reducing premiums.
“We're currently working with the states to roll out $260 million worth of mitigation works,” he said, as reported by ABC. “We would expect there'd be transparency from insurance companies about how that would drive down premiums because their track record hasn't been great in some parts of the country.”
