Flood Crisis Exposes Insurance Shortfalls in NSW: Brokers Warn of Unmet Coverage Needs

1

The Insurance Council of Australia has declared the situation a catastrophe, setting up an insurance hub in Taree to assist those affected. The number of claims has already surpassed 6,000, highlighting the widespread impact. Unfortunately, many find themselves without adequate cover. Farm insurance packages generally exclude flood protection, leaving essential assets like properties at risk, despite coverage for equipment such as tractors and quad bikes.

Matthew Fawcett, a broker from Insure More, notes that regional businesses, particularly those in Taree, feel the weight of sky-high flood insurance costs. With the area worst affected by the disaster, there is mounting fear that Taree might turn into a "ghost town" if businesses retract. Fawcett forewarns that critical commercial streets might be left barren, as shopkeepers choose between prohibitive rent or persistent flooding if they return, underscoring the urgent need for flood mitigation measures like a levee on Victoria Street.

Without these protective measures, the insurers' willingness to provide cover remains low. Historical urban structures in Taree, built around waterways, heighten the risk, resulting in insurers retracting or inflating costs, reflecting the intensifying risk climate. The sentiment is shared in Maitland, where Arma Insurance Brokers' Amanda Morris recounts that many are uninsured due to the unfeasibility of flood premiums, which can soar as high as $30,000. While Maitland has avoided the worst, largely due to an intact levee, the financial burden remains severe for those gambling between economic strain and potential flood loss.

For many residents, especially the elderly in more prestigious areas, the cost of flood insurance is simply untenable, leaving them incredibly vulnerable. Morris highlights that even with unprecedented flooding levels, insurance claims remain scant, as the lack of coverage leaves residents and businesses to bear the brunt of financial damages.

The flooding in New South Wales underscores a critical gap in insurance offerings and uptake, driven by financial inaccessibility. It calls for a concerted effort towards policy reform, infrastructure improvement, and pricing revision to better shield vulnerable communities from such devastating events in the future.

Published:Tuesday, 3rd Jun 2025
Source: Paige Estritori

Share this news item:

Insurance News

Clear

TAL Collaborates with Insurtech to Launch Embedded Life Insurance 17 Jun 2025: Paige Estritori Australia's prominent life insurer, TAL, has partnered with the global insurtech firm, Cover Genius, to introduce an innovative 'digital-only', embedded life insurance product. This new solution aims to serve Australian workers such as part-time employees, contractors, and casual staff who often lack access to affordable insurance coverage. - read more

Growing Mistrust in New Zealand Insurers Amid Rising Costs 17 Jun 2025: Paige Estritori Recent findings from a Consumer NZ survey highlight increasing skepticism towards insurers in New Zealand, as affordability remains a significant concern for many. The survey noted that insurance now ranks as the fourth-largest financial pressure among respondents, trailing housing, food, and household debt, marking an upward shift from sixth place last October. This change has negatively impacted the industry's reputation, with more individuals expressing distrust towards insurers. - read more

No Refund Policy Upheld in Camper Tent Dispute 16 Jun 2025: Paige Estritori The Australian Financial Complaints Authority (AFCA) has supported Open Insurance's decision to deny a refund to a customer who cancelled his motor policy after being informed that his new rooftop tent installation would breach policy guidelines. The policyholder was advised that any modifications, including a 'slip on camper/tent or camper conversion,' would void coverage, prompting him to cancel his insurance in March. - read more

Acenda Secures Four Key Wins at Life Insurance Excellence Awards 16 Jun 2025: Paige Estritori In a triumphant moment for Australian life insurer Acenda, the company secured top honours in four of the ten categories at the Australian Life Underwriting and Claims Association (ALUCA) Life Insurance Excellence Awards. Formerly known as MLC Life Insurance, Acenda emerged as a finalist in nine categories, ultimately winning the Leadership Award, Claims Team Award, Customer Service Team Award, and Partnership Impact Team Award. - read more

AFCA Upholds Insurer's Decision on Claimant's Non-Disclosure 12 Jun 2025: Paige Estritori A recent ruling by the Australian Financial Complaints Authority (AFCA) supported Auto & General's decision to deny a motor policyholder's claim after a crash. The decision stemmed from the policyholder's failure to disclose a driving-related good behaviour bond, despite his claims of a learning disability affecting his understanding of the policy's inquiries. - read more