October to April is considered the peak time for bushfires, heatwaves, floods, tropical cyclones and thunderstorms in Australia, but severe weather can occur at any time throughout the year.
The UN’s Intergovernmental Panel on Climate Change (IPCC) recently warned of more frequent and severe weather events caused by rising global temperatures.
So, how confident are you that you’re ready?
It pays to be prepared
Within our strata ecosystem, we know there are many ‘jobs to be done’ to stay ahead and we all have a role to play in creating a safe community environment.
Regular property inspections can help keep on top of pre-existing issues, as well as some simple things residents can do to ensure their properties are well prepared for storm season.
• Remove dead or rotting trees and trim overhanging branches
• Secure loose items like garden furniture, umbrellas and sheds
• Clear and secure gutters
• Repair damaged or loose roof tiles
• Secure any boats or vehicles
• Prepare an inventory of home contents
• Have a storm readiness kit – torch, radio, candles, matches, new batteries and important documents or contact numbers
A positive response
A recent report by Deakin Business School1 revealed climatic events have a major impact on the affordability and availability of insurance, with the top three claims costs between 2016 and 2020 being storm damage, water damage and fire damage.
Everyone will remember the terrible hailstorms in South East Queensland during the summer of 2019/2020, followed by destructive hailstorms in the ACT and New South Wales in January 2020. Over 132,000 claims were lodged, with estimated insurance losses from the combined hailstorms in Victoria, the ACT and New South Wales exceeding $1.682 billion, as well as $480 million in Queensland alone.
As such, we’re pleased to see an increase in the number of our customers who’ve taken up flood cover, with over 70% now insured against the risk of flood.
It’s reassuring to see people getting appropriate protection for their property, ensuring they will receive immediate help and support if the worst happens.
An industry taking responsibility
Following the findings of the Royal Commission, the insurance industry and the Government have been working together to address many of the issues raised. The affordability and availability of insurance in Northern Australia has been a hot topic, fiercely debated to find a long-term solution. The good news is the approaching storm season is likely to be the last before a government-backed reinsurance pool for cyclones and flood-related damage is introduced.
Due to start on 1 July 2022, the $10 billion Government guarantee will be available for residential, strata and small business property insurance policies in Northern Australia. The pilot program will subsidise the cost of insurance coverage for cyclones and related flood damage and is expected to reduce premiums by more than $1.5 billion over 10 years.
With over 500,000 eligible property insurance policies, it’s welcome news for many homeowners and businesses who’ve been faced with crippling insurance costs or an inability to find insurance.
The Government hopes cheaper reinsurance will encourage more insurers to enter the market, improving overall competitiveness and availability for customers in this difficult region. We welcome this development and eagerly wait to see if the government will extend this to other areas of the country, in a broader national approach to catastrophe management.
Adopting a Corporate Social Responsibility
At BCB, we’ve taken positive steps to improve our social awareness. Through the Steadfast network, we have access to sustainability ambassador Tim Jarvis. He’s committed to helping find practical solutions to environmental problems and promoting a roadmap for change on issues such as climate change, reducing our carbon footprint and embedding awareness of environmental issues into decision making.
Within our strata ecosystem, we’re driving forward this same level of social conscience. We’re fostering discussion on the key issues like the suitability of our Building Codes, ways to create, maintain and manage more sustainable, greener buildings, and adapting insurance policies to provide appropriate cover for the changing environment.
So, while the Government and industry prepare the policy and framework for the reinsurance pool, we encourage you to review the insurance requirements for the strata plans you manage and talk to BCB about whether they’re adequately covered.
By working together with Australia’s most experienced specialist insurance broker, you can help us ensure we’re all United, Protecting Communities.
1 A data-driven holistic understanding of strata insurance in Australia in New Zealand, commissioned by Strata Community Association and carried out by Dr Nicole Johnston, Senior Lecturer in the Department of Finance at Deakin Business School