Insurance Council of Australia

Media releases

Short-term holiday rental hosts warned not to risk being uninsured

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Short-term holiday rental hosts warned not to risk being uninsured

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News release

Wednesday, 13 April 2022

As hundreds of thousands of Australians head away for the Easter break, the Insurance Council of Australia (ICA) is warning short-term holiday rental hosts not to place their most valuable asset at risk.

The attraction of earning extra income from short-term holiday rental is financially appealing, but for the uninsured it could lead to disaster.

Almost 500,000 Australian hosts have listed their property on short-term holiday rental platforms since 2016 and Easter and Christmas are particularly popular times to list.

However, hosts who offer their properties on short-term holiday rental platforms are most likely not protected for any damage caused by their short-term tenants under their home and contents insurance.

Most insurers regard short-term holiday rental as a commercial use of a property or a business activity.

A home building or contents claim incurred while a property is being rented by short-term tenants may be declined, leaving the host financially liable and potentially vulnerable to financial loss.

Some insurers have responded to the increasing popularity of short-term holiday rentals by offering specialty policies for hosts who self-manage their property.

Cover like this can be tailored to the number of nights the property is rented and the daily cost can be as little as the price of a take-away coffee.

It can cover paying guest-related accidental or malicious damage, theft or attempted theft, personal liability if a guest is injured, identity theft, and strata property damage.

Short-term landlord insurance policies are also available to cover a professionally managed property.

Hosts considering short-term holiday renting should:

  • Check their building and contents insurance policy details prior to advertising on short-stay holiday rental platforms. If the policy doesn’t cover short-term rental look for a specialty policy at findaninsurer.com.au that protects both home and contents while paying guests are staying.
  • Not rely solely on the rental platform’s host protection insurance as there may be gaps in the cover offered.
  • Be aware that home insurance includes public liability coverage, however, the commercial activity of short-term holiday stays may invalidate this cover for some claims.
  • Reduce the risk of theft by removing valuables during the short-term stay.
  • Check strata rules, tenancy agreements and local council laws because these may prohibit short-stay holiday rental.
  • Ensure their property is safe and secure.

Quote attributable to Andrew Hall, CEO ICA:

Short-term renting is a legitimate and attractive activity that turns many homeowners into short-term landlords, but it’s vital that they do this properly and have insurance cover for the unexpected.

The Insurance Council is aware of frightening stories of hosts returning after short-term paying guests have departed to find their house stripped of possessions or significantly damaged.

Short-term rental landlords wouldn’t leave home without locking their property – this Easter they mustn’t leave home without the right insurance cover.

 

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Appointment of Catherine Fitzpatrick as Domestic, Family and Sexual Violence Commissioner

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Appointment of Catherine Fitzpatrick as Domestic, Family and Sexual Violence Commissioner

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News release

Friday, 8 April 2022

The Insurance Council of Australia (ICA) today welcomed the appointment by the Federal Government of Catherine Fitzpatrick as Australia’s first Domestic, Family and Sexual Violence Commissioner.

Catherine has had a distinguished career in government, infrastructure and more recently in banking, where she has led innovative programs to improve the ways in which the financial services sector interacts with customers experiencing vulnerability.

Catherine’s work in this area has led to her appointment to several important advisory committees, including the New South Wales Domestic and Family Violence Corporate Leadership Group, the National Plan Advisory Group, and Chair of the National Women’s Safety Alliance policy and advocacy advisory committee.

The Insurance Council works with consumer advocates and its members on programs run by individual insurers and sector-wide to support customers affected by family and domestic violence.

The 2020 General Insurance Code of Practice includes an obligation that Code participants have a publicly available family violence policy.

The ICA’s recently released election policy platform, Building a More Resilient Australia, calls for a uniform definition of family violence and a requirement that policymakers and regulators consider any implications for survivors of family violence when making new regulation.

The ICA and the insurance sector look forward to working with Catherine in her new role.

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

Catherine’s appointment demonstrates the leading role the financial services sector has taken to support customers experiencing vulnerability with family and domestic violence.

It is a terrific recognition of Catherine’s deep commitment to and leadership of this critical area of public policy and customer engagement and support, and we look forward to supporting her share this work across the community.

 

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ICA welcomes Federal funding for Qld resilience package

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ICA welcomes Federal funding for Qld resilience package

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News release

Thursday, 7 April 2022

The Insurance Council of Australia (ICA) has welcomed the Federal Government’s decision today to agree to fund half of the Queensland Government’s $741 million extreme weather resilience package.

Improving the resilience of homes and communities at risk of impacts from floods, cyclones and bushfires is the responsibility of all levels of Australian governments.

That is why the Insurance Council supports comments made by the Prime Minister this morning that state and territory governments need to strengthen land use planning arrangements, improve building standards, and remove taxes on insurance which only decrease adequate insurance cover.

The Insurance Council has already called for the Federal Government to commit to matched funding of similar programs in other states and territories as outlined in the ICA’s recent Building a More Resilient Australia report and as recommended by the Productivity Commission.

The $2 billion, five-year investment pipeline set out in the report, half funded by the Federal Government and half by the states and territories, is estimated to save governments and households at least $19 billion to 2050.

Shared funding is required on the following basis:

Jurisdiction

Investment $m

Return $m

ROI

Queensland

726

6,290

9

Northern Territory

16

313

20

ACT

4

17

4

New South Wales

232

5,651

24

Tasmania

46

938

21

Western Australia

192

979

5

Victoria

223

3,185

14

South Australia

30

1,361

46

Not allocated

532

522

1

 

2,000

19,256

10

Quote attributable to ICA CEO Andrew Hall: 

Today’s decision by the Federal Government is very welcome, and we hope it’s the first of a series of announcements to split funding with states and territories on measures to better protect communities and homes from the impacts of extreme weather.

Resilience and mitigation funding is an investment into future protection, and we support comments by the Prime Minister for other states and territories to do more to improve community resilience in their own jurisdictions.

Unless we can reduce the risk with stronger homes located in the right places, extreme events will continue to cost taxpayers millions of dollars, and the mental health and trauma of communities will continue to be experienced. 

 

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Federal decision on Queensland resilience funding disappointing

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Federal decision on Queensland resilience funding disappointing

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News release

Wednesday, 6 April 2022

The Insurance Council of Australia (ICA) today expressed its disappointment in the Federal Government’s decision to not contribute to the Queensland Government’s extreme weather resilience package.

Last Month the ICA welcomed the Queensland Government’s announcement of a $741 million Resilient Residential Recovery package to better protect Queenslanders from the impacts of extreme weather events, such as flood and cyclone.

The Queensland Government had requested that the Federal Government fund 50 per cent of the package, which was designed to assist Queenslanders pay for resilience measures such as retrofitting and raising homes in flood impacted areas.

The ICA has long been calling for the Queensland Government to lift its investment in this area, and late in February released its Building a More Resilient Australia report which called for $726 million to be invested jointly by the Queensland and Federal Governments over the next five years.

Building a More Resilient Australia calls for Federal Government investment in measures to better protect homes and communities from the impacts of extreme weather to be doubled nationally to $200 million a year over five years, and for this to be matched by the states and territories.

Last week, the ICA welcomed the Federal Government’s 2022-23 Budget announcement of $268 million in related measures to better protect Australians from the impacts of extreme weather.

While the two-year commitment to resilience funding was welcome, sustained and greater funding in this area is required if the risk profile of communities exposed to extreme weather is to change.

A poll undertaken last month for the ICA found that 68 per cent of people living in Greater Brisbane say that not enough is being invested by governments at all levels to protect homes and communities from extreme weather events, with 62 per cent calling for funding to at least double.

Fifty-two percent of those surveyed in the Queensland capital believe funding of this important protection is the responsibility of the State and Federal governments equally.

As of Friday 1 April, more than 92,700 claims had been lodged in Queensland in relation to the March floods, with an estimated claims cost of $1.3 billion.

Quote attributable to ICA CEO Andrew Hall:

As severe rain and flooding continues to impact the east coast the failure of the Federal Government to match Queensland’s investment in measures to improve household and community protections against extreme weather is disappointing and short-sighted.

If Australia is to get serious about improving our resilience to flood, bushfire and cyclone, all levels of government must contribute.

Australians – particularly those still impacted by the ongoing rain and flooding – want governments to come together to provide better protections against worsening extreme weather, not wash their hands of responsibility.

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Reinsurance Pool legislation passes

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Reinsurance Pool legislation passes

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News release

Wednesday, 30 March 2022

The Insurance Council of Australia (ICA) today welcomed the passage of legislation to enable the establishment a Reinsurance Pool for cyclone and cyclone-related flood for homes, strata corporations and small businesses.

It is now incumbent upon the Australian Reinsurance Pool Corporation (ARPC) to release its pricing schedule to give the sector time to price in reinsurance costs and provide visibility to policyholders on expected premium reductions.

The insurance sector has worked constructively with the Federal Government since the Pool was announced in the lead up to last year’s Budget and will continue to engage with the ARPC, Treasury and the ACCC in the lead-up to implementation, planned from 1 July this year.

A Reinsurance Pool is just one lever available to influence premium prices in cyclone-impacted regions of Australia.

To achieve sustainable premium reductions for those exposed to the risk of extreme weather, including cyclones, governments must increase investment in local infrastructure and household-level programs.

That’s why last month the ICA released Building a More Resilient Australia, which set out an investment pipeline of $2 billion over five years jointly funded by the Federal and state governments to better protect communities and households from cyclone, flood, and bushfire risk.

Quote attributable to ICA CEO Andrew Hall:

Insurers welcome the passage of the reinsurance pool legislation, which is an important next step on a very complex issue.

The Pool is scheduled to commence in just three months, so it’s vitally important that insurers and their customers are able to understand how and to what extent this will impact on premiums.

We look forward to the ARPC releasing that information as soon as possible.

However, a Reinsurance Pool is just one piece of the puzzle.

The recent and ongoing floods have shown the urgent need for investment in measures to better protect homes and communities.

While we welcomed the increased funding in last night’s Budget for those communities impacted by this year’s floods, there are dozens of other communities in Australia that remain exposed to perils like cyclones and require similar assistance to uplift their mitigation.

In the lead up the election in coming weeks it is incumbent upon the Government to not only assist with recovery, but announce further investments to better protect communities from the impacts of extreme weather.

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Insurance Council welcomes resilience and cyber investment

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Insurance Council welcomes resilience and cyber investment

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News release

Tuesday, 29 March 2022

Key budget takeaways impacting insurance:

  • $268.1 million in resilience preparedness related measures
  • $9.9 billion in cyber security over 10 years to improve cyber preparedness
  • $2 billion expansion of the Home Guarantee Scheme

The Insurance Council of Australia (ICA) today welcomed the Federal Government’s 2022-23 Budget announcement of $268 million in related measures to better protect Australians from the impacts of extreme weather and improve protections against cyber attacks. 

Under the Emergency Management Fund, the Government has committed $150 million per annum for recovery and post-disaster efforts over the next two years. An additional $116.4 million has been provided to the Black Summer Bushfire Recovery Program, funding 524 community projects with total program investment of $390 million.

Emergency Management Australia has received an additional $1.7 million to better share data and information across states and territories during large scale disasters.

The ICA has long been calling for the Federal Government to lift its investment in this area, and just last month released its Building a More Resilient Australia report which called for a doubling of Federal Government investment to $200 million in this area over the next five years, matched by the states and territories.  

The ICA’s proposed $2 billion resilience investment pipeline included:

  • $522 million for local projects such as flood levees to defend regional towns 
  • $413 million to better protect homes against flood, Australia’s most expensive natural peril, by raising utilities and services above the expected floodline
  • $221 million to cyclone-proof more than 44,000 homes in northern Australia 
  • $712 million to support the selective reduction of fuel in our forests 
  • $37 million for an improved national flood early warning system, estimated to increase the lead time for flood warnings from 3-5 to 10-15 days
  • $10 million to establish a national coastal hazard information database  

While the two-year commitment to resilience funding is welcome, sustained and greater funding in this area is required if the risk profile of communities exposed to extreme weather is to change.

The Insurance Council welcomes the Government’s $9.9 billion investment over 10 years to boost the nation’s capacity to prevent and respond to cyber threats.

This follows the release of an Insurance Council report on Monday, Cyber Insurance: Protecting our way of life in a digital world, which highlights the challenges to maintaining and developing a cyber insurance market to support Australian individuals, businesses and organisations operating in a digital economy.

As announced yesterday, the Insurance Council and those members who offer Lenders Mortgage Insurance (LMI) remain concerned about the continued expansion of the Home Guarantee Scheme, which removes the need for eligible borrowers to have LMI.

By displacing a proportion of the LMI market, the cost of providing LMI to borrowers who do not access the Scheme is potentially impacted. 

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

The Insurance Council has long been calling for the level of investment in resilience measures to be increased, so funds confirmed in the Federal Budget are an important step in the right direction. 

The funds identified for the northern rivers rebuild is needed to ensure that community can rebuild stronger homes and infrastructure in a way that makes them more resilient to future extreme weather events.

While we are pleased the Federal Government is heeding this important call to step up its funding in resilience measures, there are dozens of other communities in Australia that remain exposed and require similar assistance, and we look forward to working with all levels of Government to assist in resilience and mitigation efforts.

Insurers welcome additional investment in cyber-security and resilience related measures to better protect Australian from the impacts of extreme weather and cyber threats in the digital age. We look forward to working with the Government in these important areas of public policy.

Useful links

ICA Election Platform
ICA Cyber Insurance White Paper
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