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One in 25 Australian homes could be uninsurable by 2030: Is yours at risk?

One in 25 Australian homes could be uninsurable by 2030: Is yours at risk?

A new report released by the Climate Council has revealed that nationwide, approximately 520,940 properties – or one in every 25 – will be at high risk of having annual damage costs that will make them effectively uninsurable by 2030.

The Climate Council characterises high risk homes as “having annual damage costs from climate change and extreme weather equivalent to 1% or more of the property’s replacement cost”. 

These properties are seen to be effectively uninsurable, because even though policies might still be offered by some insurance providers, insurance premiums are expected to become too expensive for people to afford.

Additionally, 9% of properties (1 in 11) are expected to reach the medium risk classification by 2030, with annual damage costs that equate to 0.2-1% of the property replacement cost. According to the Climate Council, these properties are at risk of becoming underinsured.

Climate Councillor and leading economist Nicki Hutley said: “It is clear that Australia is fast becoming an uninsurable nation.”

“Skyrocketing costs or flat-out insurance ineligibility are becoming more and more widespread under climate change. As an economist, I find these new numbers shocking and deeply concerning.”

Following the devastating floods in parts of the east coast of Australia earlier this year, the Insurance Council of Australia (ICA) reported that as of 10 March, insurers had received a total of 118,016 claims in relation to the weather events. The ICA declared it an “insurance catastrophe”.

Climate Valuation’s CEO, Dr Karl Mallon, said: "Insurers and banks are already quantifying the risks from climate change.

“It’s essential that Australians inform themselves about these risks to their safety and financial wellbeing, which are well known to financial institutions and governments.”

Is your home in one of the most at-risk electorates?

Based on the percentage of 'high risk' properties by 2030, the top 10 most at-risk electorates are:

  1. Nicholls, Victoria: 27% or 25,801 properties 
  2. Richmond, New South Wales: 20% or 22,274 properties 
  3. Maranoa, Queensland: 15% or 9,551 properties 
  4. Moncrieff, Queensland: 14% or 18,032 properties 
  5. Wright, Queensland: 14% or 12,140 properties 
  6. Brisbane, Queensland: 13% or 19,355 properties 
  7. Griffith, Queensland: 13% or 14,812 properties 
  8. Indi, Victoria: 11% or 11,215 properties
  9. Page, New South Wales: 11% or 11,691 properties 
  10. Hindmarsh, South Australia: 11% or 10,775 properties

The Climate Council has transformed hundreds of millions of data points, which were analysed by climate risk analysis company Climate Valuation, into a new interactive Climate Risk Map that Australians can use to understand risks in their area.

To use the map, you can enter in your postcode, suburb, local government area or electorate to discover the risk of fires, floods and extreme wind in your area, based on low, medium and high emissions scenarios.

“I urge all Australians to use this tool to understand the risk they and their communities face as we progress through this critical make or break climate decade,” Ms Hutley said.

“This map makes it clear that the emissions pathway the next federal government sets us on will play a critical role in determining the insurability and future prosperity of entire communities and regions across the country.”

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This article was reviewed by Head of SEO Leigh Stark before it was published as part of RateCity's Fact Check process.

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