Tuesday, 5 July 2022

The Insurance Council of Australia (ICA) has declared a ‘significant event’ for regions of New South Wales impacted by significant storm and flooding over the past few days.

The ICA's preliminary catastrophe processes have been activated, assisting the ICA and insurers to assess the insurance impact of the current flood event.

Under a significant event declaration:

• The ICA commences its claims data collection, analysis, and reporting processes in consultation with members.
• ICA representatives will continue to work with government and agencies to understand impacts on the community and ensure affected residents receive assistance.
• The ICA’s disaster hotline is activated 1800 734 621; offering assistance to policyholders if they are uncertain of their insurance details or have general enquiries about the claims process.

This event may be escalated to an insurance catastrophe if there is a significant increase in claim numbers or complexity, if the geographical spread of this event is extended or in consultation with insurers.

The impact of flooding has been felt most significantly in communities surrounding the Hawkesbury and Nepean Rivers, however all regions impacted by flood in NSW since 1 July fall under the significant event declaration.

This remains an unfolding weather event and insurers’ priority is community safety. We strongly encourage all those impacted to put their safety first and adhere to evacuations orders.

If your property has been impacted, please contact your insurer as soon as possible to commence the claims process, even if you do not know the full extent of damage.

Insurers understand this is a distressing time for policyholders already impacted by floods this year and will be placing a high priority on those with ongoing claims.

Quote attributable to ICA CEO Andrew Hall:

This is the fourth flood event for some New South Wales communities this year and we understand this is going to be an incredibly difficult time for many.

Insurers understand the emotional impact of these extreme weather events which are becoming more frequent and severe and will be taking swift action to ensure communities receive the assistance they need as quickly as possible.

Insurers are well prepared to respond to these events, but it is clear the community needs to be better protected from worsening extreme weather and that requires greater investment in mitigation and resilience.

Insurance and flood damage – what to do when you return to your property:

• Safety is the priority - don’t do anything that puts anyone at risk.
• Only return to your property when emergency services give the go ahead.
• If water has entered the property, don't turn on your electricity until it has been inspected by an electrician.
• Contact your insurance company as soon as possible to lodge a claim and seek guidance on the claims process.
• You can start cleaning up but first take pictures or videos of damage to the property and possessions as evidence for your claim.
• Keep samples of materials and fabrics to show your insurance assessor.
• Remove water or mud-damaged goods from your property that might pose a health risk, such as saturated carpets and soft furnishings.
• Make a list of each item damaged and include a detailed description, such as brand, model and serial number if possible.
• Store damaged or destroyed items somewhere safe.
• Speak to your insurer before you attempt or authorise any building work, including emergency repairs, and ask for the insurer’s permission in writing. Unauthorised work may not be covered by your policy.
• Do not throw away goods that could be salvaged or repaired.

Tuesday, 28 June 2022

New data shows that the destructive flood that swept through South-East Queensland and Northern New South Wales in late February and early March has caused $4.8 billion in insured damages and is now the third costliest extreme weather event in Australia’s history.

Only Cyclone Tracy (1974) and the Sydney hailstorm (1999) caused more insured losses, and this year’s East Coast Flood is the costliest flood in Australian history, the Insurance Council of Australia (ICA) said today.

Close to 225,000 insurance claims relating to the event have been lodged across both states, an increase of 3.6 per cent on last month’s count.

However, as claims assessments continue to be completed, insurance costs for the event have increased 12 per cent on last month, driven in part by increasing materials and labour costs.

Almost 30 per cent of claims have been closed and $1.5 billion has already been paid to policyholders.

With almost 125,000 home claims stemming from the 2022 East Coast Floods, local councils need to be preparing for an influx of development applications for the very large number of property rebuilds and repairs required.

This week marked four months since the ICA declared the event an Insurance Catastrophe.

The event stretched over several days and many claims were not made until days, weeks or months after the initial event, with locations like Lismore being hit for a second time at the end of March, generating many new or additional claim lodgements.

The four-month mark is significant because under the General Insurance Code of Practice insurers are required to make a decision on a claim four months after it is lodged.

However, the Code allows for changes to timeframes where they cannot be practically met, for example due to the complexity of the claim or delays in expert reports, such as hydrology and engineer reports.

The ICA has been holding community forums in impacted towns and cities throughout June, which has enabled insurance customers to meet directly with their insurer.

Quote attributable to Andrew Hall, CEO, Insurance Council of Australia:

The sheer scale of the extreme weather event that devastated Queensland and New South Wales is something we have never seen before, and the cost continues to rise.

Money is flowing into these devastated communities with $1.5 billion already paid and this number increasing every day.

Insurers are working hard to resolve claims as quickly as possible and have put on hundreds of extra staff to support claims processing as delays not only impact the policyholder, in most cases they also add costs to the insurer.

Past experience has shown us that local councils need to be looking at what they can do to process the higher than usual number of development applications we expect to see as a result of this flood.

The time it takes for some property claims decisions to be made has been a consistent issue raised at our policyholder forums in New South Wales and Queensland.

There are clear obligations and regulations on insurers around claims, but ultimately the type of claim, the assessment required and the complexity of the repair or rebuild can impact that process.

Timeframes stipulated in the Code:

• Insures are obligated provide an update at least every 20 business days after a claim has been submitted.
• A routine enquiry must be responded to within 10 business days.
• Insurers are required to make a decision on a claim within four months of lodgement.
• Changes to timeframes are permitted where they cannot be practically met.

Wednesday, 1 June 2022

The cost of the record-breaking flood that hit South-East Queensland and Northern New South Wales earlier this year continues to rise and is now Australia’s fourth costliest disaster, the Insurance Council of Australia (ICA) said today.

As of Tuesday 31 May, insured losses are estimated at $4.3 billion from 216,465 claims across both states.  

The cost is almost double that of the 2011 Brisbane flood, which saw $2.3 billion in insured losses. 

The extreme weather event has now surpassed the 1989 Newcastle Earthquake, which recorded $4.24 billion in insured losses and falls fourth behind the following (all normalised to 2017 values):  

• Eastern Sydney Hailstorm (1999, $5.57 billion) 
• Cyclone Tracey (1974, $5.04 billion) 
• Cyclone Dinah (1967, $4.69 billion) 

The 28 per cent rise in estimated claims cost from last month’s figures is largely due to the progression in the claims assessment process and an increase in commercial claims, which are typically slower to come through and have a greater cost per claim. 

Insurers are working as fast as possible to support their customers, with more than 20 per cent of claims already closed and almost $1 billion paid to policyholders.  

Quote attributable to Andrew Hall, CEO, Insurance Council of Australia:  

The Insurance Council and insurers continue to work with communities affected by this record-breaking flood, now Australia’s fourth costliest disaster. 

Over the past two weeks we have been holding community forums in flood-impacted areas of New South Wales, and next month will spend two weeks holding forums in Queensland towns and in Brisbane.  

Keeping Australia insurable as extreme weather events worsen requires governments to invest in appropriate physical mitigation and adaptation strategies.  

Insurers and the Insurance Council look forward to working with the Albanese Government to implement its $200 million Prevent, Repair, Rebuild package, to better protect Australian homes and communities from the impacts of extreme weather.