Could climate change affect your insurance?
As bushfires continue to ravage through New South Wales and Queensland, with more catastrophic conditions forecasted, experts are suggesting that this unprecedented early fire season is due to climate change. The climate crisis is bringing more intense drought and episodes of severe fire weather than ever before.
What does this mean from an insurance point of view?
Global warming is said to be compounding climate risks like flooding, coastal inundation, bushfires, drought-induced subsidence risk and wild weather.
Recent research by The 'Climate Risk' consultancy predicts that if global warming continues at its current rate, a number of properties could end up being uninsurable. The research also suggests that global warming could increase the potential cost of property damages in the future (assuming all potential risks are insured) by 55% ¹.
Which parts of Australia are most likely affected by climate change?
Climate change is super-charging Australia's natural disaster risks. For instance, throughout November 2019, fires have been burning in places and at intensities never before experienced. Whole rainforests in Northern New South Wales and tropical Queensland have gone up in flames, as have the formerly wet old-growth forests in Tasmania.
Early bushfires haven't been limited to New South Wales, Queensland and Tasmania, with parts of South Australia also affected. By the beginning of November this year, Australia has already lost about as many homes as during the disastrous 2001-2002 bushfire season².
Those who take out insurance for their homes or businesses should check their policies cover natural disasters like bushfires, flooding and cyclones.
Tips to ensure your assets are adequately protected
- Check your policy to make sure your property and contents are insured for the right amount it would cost to replace your possessions.
- When considering the rebuild cost of a property, take into account extra costs, including demolition, debris removal and compliance with modern building codes.
- Get familiar with your policy documents so you know exactly what you can claim and what you can't.
- Don't wait until it's too late - upgrading or changing your insurance cover once an extreme weather event (like flood, bushfire or cyclone) has been predicted is too late. Insurers will generally have embargoes in place preventing affected postcodes from placing new or additional coverage.
How Coverforce can help
Our experienced team of insurance brokers can assess your risks and provide personalised advice on the right insurance program to protect your business and assets. Our focus is always on reliable protection and value for money.
To find out more about getting reliable cover for your business, contact your local Coverforce Office today.
References
- https://www.insurancenews.com.au/local/queensland-dominates-climate-change-hotspots-study
- https://www.msn.com/en-au/news/australia/this-is-not-normal-whats-different-about-the-nsw-mega-fires/ar-BBWxUfn?ocid=spartandhp
The information provided in this article is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. If you require advice that is tailored to your specific business or individual circumstances, please contact Coverforce directly.
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