Media release – Farmers for Climate Action, 14 August 2023
Climate change pushes farm insurance through the roof
Farmers for Climate Action, an organisation representing more than 8000 Australian farmers, says two recent insurance reports have laid bare the rising cost of climate change inaction.
Research by the Actuaries Institute released today (Monday August 14) says the median home insurance premiums are up 28 percent in the year to March 31, the biggest increase in 20 years. People in flood prone areas are facing price hikes of up to 50 percent.
The actuaries noted that part of the increase was due to higher building supply costs, but it was also “driven by climate change impacts we’re already seeing.”
This follows a report last week by consumer group Choice, which found 87% of policyholders in Australia have seen insurance premiums rise, and two in five people reported having their homes impacted by an extreme weather event in the last five years.
Ulmarra farmer Peter Lake says climate change has made floods on his northern New South Wales farm more frequent and severe, and made his farm insurance unaffordable.
“We’ve dealt with major floods in 2009, 2011, 2013, and 2021 but nothing could have prepared us for February 2022. We lost fences and fodder and were forced to sell most of our stock. Even when the waters receded we were flood free but not mud free. We battled mud for months,” he said.
Since then the member of Farmers for Climate Action has seen his insurance bill skyrocket.
“I was quoted $19 000 per year to insure my farm which is just too much. We’ve had to weigh up not insuring our farm equipment, sheds and fences. We’re only insuring the house and a horse float now.”
“To stop the costs of climate change going higher we need urgent action to reduce emissions, including from coal, oil and gas, right now, this decade,” Mr Lake said.
Featured image above: Peter Lake’s northern NSW property in 2022.
Media release – The Climate Council, 15 August 2023
Nearly one in eight Australian households experiencing insurance unaffordability in wake of escalating climate crisis
New research reveals the devastating financial impact that worsening extreme weather is having on Australian families. Driven by accelerating climate change, communities across the country are being hit hard by extreme weather events and skyrocketing insurance premiums.
The research (Home Insurance Affordability Update and Funding for Flood Costs: Affordability, Availability and Public Policy Options), released today by the Actuaries Institute, shows an estimated 1.24 million Australian households (nearly one in eight) are facing an insurance affordability crisis. This is an increase of 240,000 households when compared to the last time this study was conducted in March 2022.
These families are spending two months of their annual income on home insurance, which is more than seven times what the average household spends.
For those living in disaster-prone areas, including the Northern Rivers region, north Queensland and Western Australia, insurance premiums have risen up to 50% in 12 months.
Fossil fuels like coal, oil and gas are the main driver of accelerating climate change, which is making extreme weather events like bushfires, heatwaves and droughts more frequent and severe.
Nicki Hutley, Climate Councillor and economist, said: “These figures really bring home how difficult accelerating climate change is making insurance affordability for so many, particularly those who are most vulnerable. This is a wicked problem that we need to act on now before things get even worse.”
The Climate Council’s research into the mental health toll of compounding and worsening climate change, released in January 2022, showed that one in 20 Australians had cancelled their insurance coverage because it was no longer affordable.
“Experiencing a disaster is difficult enough, but now many Australians are discovering their insurance doesn’t cover them for disaster or is insufficient. A growing number of households, and particularly low-income households, can no longer afford premiums at all. This means many families affected by a disaster can find themselves facing huge bills with no means to pay them, sometimes without a safe place to stay, all while processing the trauma of the event itself.
“Back-to-back fires and floods in recent years have brought home that the climate crisis has well and truly arrived in Australia – and around the world. We should expect to face more frequent and more fierce disasters. Australia’s record on disaster resilience is well below where it should be, and this has contributed to rising insurance costs. We need to direct more funding to resilience measures in homes and communities to reduce risks, rather than relying on post-disaster recovery. This is better for communities, the environment and the economy, and a necessary step to make insurance more affordable,” Ms Hutley added.
