Experts warn that increased flooding events in Australia caused by climate change could make insurance premiums too expensive for the average resident to afford.
We already see the impacts of climate change in our country, and data shows that Australia is flooding more than ever because of it. This is because our atmosphere now holds more water; our oceans’ heating means more evaporation and heavier rain systems, while the La Niña phenomenon has increased the likelihood of severe systems colliding.
Severe weather events like flood, bushfires and hail have already hit insurers hard, and they were forced to pay out $5.3 billion for damages caused during the first quarter of 2020.
Mark Leplastrier is an atmospheric scientist and also the head of Insurance Australia Group’s (IAG) Natural Perils unit. He said that climate change was making all of these weather events worse with every cycle.
“The main thing is, with climate change in the background of a natural variability cycle, if you have the same event coming back, and you have more warming, you have extra rainfall or intensity associated with that,” he said.
We have seen this recently with the record flooding in New South Wales that has seen 17,000 insurance claims filed – a number rising as fast as the floodwaters. There are also fears that significant weather systems like cyclones could strike areas like south-east Queensland and northern NSW, which have never seen powerful storms like that.
Insurance costs are almost outreach in some regions already
You only have to look at North Queensland to see how the severe weather events have impacted insurance costs. Cyclone Yasi’s devastation alone caused strata premiums to more than triple from $25,000 for 25 apartments to $81,000. By the time Cyclone Debbie rolled around in 2017, many North Queenslanders could not afford insurance anymore due to the skyrocketing premiums.
The situation is so severe that homeowners have asked for Federal Government intervention, and the Australian Competition and Consumer Commission (ACCC) has launched the Northern Australia Insurance Inquiry, which is due to be concluded soon.
A big fear now is that climate change could lead to another once-in-a-generation flooding event in a region like North Queensland, which could then see a cyclone collide with the existing chaos. That would cause widespread devastation and potentially see premiums soar to completely unaffordable levels.
Renewable energy and sustainability remain crucial to reversing climate change
The world is moving towards a net-zero carbon future to halt and reverse the human-made climate change causing these catastrophic weather events. A large part of that is moving away from fossil fuels and turning towards renewable energy solutions like solar.
Australia is already well on its way towards a green future, with the individual states leading the way through investment in renewable energy infrastructure and solutions.
To help play your part, consider joining the two million-plus homeowners who have already installed solar panels on their roof. You will not only be helping save the world, but you will also enjoy enormous savings on your electricity bills.
