A barrage of floods and storms over the past three years has cost insurance companies more than $12 billion in claims and affected one in 25 adult Australians, according to the Insurance Council of Australia.
This damages bill is on top of government funding to help stricken communities, which has topped $4 billion in NSW just this year.
The Central West town of Eugowra was smashed by floods in November.Credit: Nick Moir
The council said the growing cost of the severe weather made it clear that more needed to be done to protect Australian lives and property.
“We must not ignore what this data is telling us to do,” council chief executive Andrew Hall said. “Invest in community-level mitigation, home retrofits, home buybacks in the most extreme cases, and better early warning systems.
“We also need to stop building homes in harm’s way and make new homes stronger.”
The council said the February-March floods that hit northern NSW and south-east Queensland are now the most expensive natural disaster in Australian history, with an insurance damage bill up to $5.65 billion.
That figure surpassed the cost of the Sydney hailstorm of April 1999, when hailstones the size of cricket balls damaged 20,000 homes and 70,000 cars across 85 suburbs.
The hail was reportedly travelling at speeds of 200km/h and caused damage to vehicle panels and windscreens, as well as to house roofs, windows and skylights.
The suburbs of Kensington, Kingsford, Botany, Mascot, Randwick and Paddington were the worst hit, and the storm caused a damage bill of $1.7 billion, although the Insurance Council said that would equate to about $5.57 billion now.
The state and federal governments have co-funded an $800 million recovery package for the Northern Rivers region that will allow residents in the greatest danger to sell their homes to the government.
Others will receive funding to raise their houses or rebuild them with more flood-resilient materials and design.
Residents of Eugowra, in the state’s central west, have called for a similar package after a dangerous flash flood on November 14 inundated the town, killing two people and washing houses off their foundations.
They have also expressed concern that insurers will assess the damage as from a flood rather than from a storm, meaning many of their properties will not be covered.
According to the insurance council, insurers have received more than 780,000 claims for damage from significant or catastrophic floods or storms since January 2020.
More than 237,000 of them related to the February-March floods, with just under a third still to be finalised.
State member for Lismore Janelle Saffin said assessors had struggled with the workload after the flood and more insurance workers, including hydrologists, were needed to clear remaining claims.
She also said some residents of Lismore could no longer secure insurance over their properties. Others could not afford insurance premiums or were under-insured.
“It’s a real problem,” she said. “We need big conversations about this.”
Figures from Resilience NSW presented to a community meeting in Kangaroo Valley last month show that more than 15,000 homes across the state were damaged in February-March and June-July, and 5500 were deemed uninhabitable.
More than 300,000 tonnes of rubbish was cleared away, and government funding to stricken communities and residents totalled about $4.4 billion.
The damage from the most recent floods to hit inland NSW is still being assessed, the Insurance Council said.
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