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Are you insured against extreme weather? New survey suggests a lot aren’t


Only three days ago residents were warned of a new round of extreme weather to batter the Central and South Coast – and that’s on the back of wild weather going around since January this year.

We’d all like to think our home insurance covers us against floods and cyclones – but a new survey commissioned by Savvy suggests 22% of New South Wales and Queensland residents don’t have insurance against extreme weather events. This is despite many people in the Central and South Coast experiencing extreme weather recently.

The survey, which polled 1,000 NSW and Queensland residents about their experiences with extreme weather events and insurance claims showed that 133 NSW residents in the poll said that extreme weather caused enough damage to their property they were forced to make an insurance claim. 55 of those residents said they claimed for flooding; 80 said they claimed for storm damage.

The increasing nature of extreme weather events may mean a similar increase in the price of insurance premiums. Overall, 61% of those surveyed said they fear ongoing weather events having this exact impact.

16.4% respondents said that their premiums have already risen by over five percent, with the same number saying their premiums have increased by ten percent.

214 respondents with Home & Contents insurance said they pay between $1,001-$1,500 for their premiums. 124 pay between $501-$1,000, with 100 spending $1,501-$2,000.

Image: Savvy.com.au

The risk gap widens

The survey also shows that there is a noticeable gap between the actual risks recorded by insurance companies and what residents believe are the risks. In the Insurance Australia Group report on natural disasters, 44.1% of survey respondents said they lived in a “Low” risk area for floods – though the IAG differs on their assessment, showing a “High” to “Medium” risk in NSW metro and regional areas.

A gap between perceived and actual risk may lead to homeowners underinsuring their property – or not insuring it at all. Just over half of respondents said (54%) they are covered by Home & Contents insurance; 8% only cover their homes, and 15.5% only cover their contents. This could potentially devastate families if they were to experience extreme weather and property damage.

What’s to blame? The young say climate change

The survey also polled opinions about what is driving the frequency in extreme weather events. 35% said that human-caused climate change is to blame, with the 18-24 age bracket more inclined to finger climate change as the culprit (45.9%). Of the 190 25–34-year-olds surveyed, 43.7% identified climate change as the most likely cause.

27.3% said it’s due to Australia being in the midst of the La Niña “cool” phase of the El Niño-Southern Oscillation. During the La Niña phase, tropical cyclones and rainfall likelihood increases to above average levels, particularly along the Eastern seaboard of Australia.

22.8% of respondents said it was just due to “unpredictable extreme weather.”

33.1% of older (45-54 years old) NSW and Queensland residents surveyed (n=172) agreed that La Niña was the main driver of the extreme weather events.

37% of women identified climate change as the cause, compared with 33% of men.

No matter the cause, the fact 22% of residents aren’t insured against extreme weather at all – and if you are unsure if you are insured against extreme weather events, you should contact your insurance company or broker immediately to find out where you stand; otherwise, you could be in store for a rude awakening.

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