Stormy weather

It’s time to fix insurance affordability

A few months ago I wrote about my experience of checking my home and contents insurance renewal notice and realising that I was being fleeced. While shifting to a new insurer allowed me to find a much lower premium, I expect to see a steep increase on next year’s renewal notice. People across the country are facing increases of 20% or more, regardless of whether they shop around.

There are several factors driving these increases, but as revealed in a recent CHOICE report, one of the most significant is the increased frequency and severity of extreme weather events like floods, bushfires and cyclones, driven by climate change. People in areas at risk of these events face much bigger problems obtaining insurance they can afford.

To understand this better, we interviewed people across the country who’d lived through an extreme event, to understand their experience of the insurance market. Some had been refused cover or quoted premiums of over $20,000 per annum. Others had paid for insurance, only to have a claim denied due to the policy wording. This was often because insurers have free rein to define common terms like ‘stormwater runoff’, meaning that some people in the same street might be covered and others not, depending on which policy they took out. We also spoke to people who had made improvements to their property to make them more resilient to flood or fire, only to find that it had no impact on their premium, despite reducing the risk to the insurer.

These problems will only get worse. Already, in the Northern Rivers region of New South Wales, people who were able to obtain flood cover in the past are now being denied insurance, after last year’s catastrophic floods changed the way insurers assess the risk of flood to their properties.

Fixing these problems won’t be simple. It requires better planning decisions to stop developing areas that are known to be at risk, and changes to the law to make insurance policies fairer and easier to understand. It requires better public information on risks to individual properties. And for communities at the greatest risk, it requires government support for sensitive and difficult conversations about moving to safer ground. If we get this right, it will make insurance more affordable for everyone – not just those in areas affected by disasters.

This requires sustained investment by all levels of government. While that may seem daunting, we’re already spending lots of money addressing these issues. The problem is that this tends to happen after a natural disaster, when people are already in crisis. It’s time to be more proactive and long-term in our thinking, so that more people can have the peace of mind and support that insurance is meant to provide.


I’m with GIO after a few years of being fleeced by a mob I won’t name. House and contents went up by $20/m … I wasnt happy about it but it could have (would have) been worse with other companies.

Northern Rivers? They should never have allowed construction on a flood plain.


Alan, I have been a loyal CHOICE member for over 40 years and have supported most of the campaigns undertaken by CHOICE. But I will not support this one, as you start with a statement for which there is no observational scientific evidence.

And the statement is this one:

The IPCC, in its most recent report (AR6), says that “there is low confidence about peak flow
trends over past decades on the global scale, but there are regions experiencing increases,
including parts of Asia, Southern South America, northeast USA, north-western Europe, and the
Amazon, and regions experiencing decreases, including parts of the Mediterranean, Australia,
Africa, and south-western USA.” (p1568 of IPCC AR6 WG1).

It is interesting that the same misinformation about the claimed increases in frequency and severity of extreme weather events is included in the CHOICE report “Weathering the Storm: Insurance in a changing climate”, but nowhere in the report is any evidence presented to support that claim. Are we supposed to just accept those statements without any supporting evidence?

On page 7 of that report, there is data about the “Impact of extreme weather events” over the past 5 years, but again, no data about what the trend in frequency or severity of those extreme weather events has really been since our records began. My guess is that data was not included because it does not support the scary “Climate Crisis” narrative. The data that is presented is completely meaningless without knowing the underlying trends.

Its a shame that CHOICE has chosen to wrap that Insurance report around false claims about the climate as it detracts from the real insurance issues, and the main issue is to make home and contents insurance simpler and fairer and easier to compare.

Welcome to the Community @DennisM

The IPCC report is always filtered by member governments. Some governments mandate watered down or minimalist conclusions to protect their own interests.

FWIW I am not a climate scientist but have worked closely with many of them over time. Having spent time listening to them argue about what and why I have developed respect for their conclusions at their organisational levels. They respect the science not the politics that have been created by vested interests, some ignorant of anything without a $ sign.

In contrast to your guess the computer models that ingest a significant amount of actual data have tracked reality to a frighteningly accurate level in modern times. Based on the ability to replicate history the forecasting modes have some credibility even if not 100% perfect everywhere at the same time.

Some observers remain denialists, sceptics, or whatever terms they feel fits their outlook better. Others are more interested in holding the public debate to a level that suits their higher standards, but that would likely cause the ‘average man in the street’ to become glassy eyed. Most in the scientific community have consensus agreement and I personally trust that. I also would be pleased if more people trusted expert investigators than guessed about this or that or pointed ‘over there’ to dilute the message or add confusion as conspiracy mongers have been so successful doing across many topics.

Choice is not a scientific journal. That data is available from the scientific community. Do you have evidence there is no reason to worry about the global climate or what and why it has essentially become more extreme in recent times?

As you suggest scepticism, would you let us know your own credentials?

How do you know the claims are false? Would you cite some peer reviewed journals? As for the link with insurance I’ll not get into that discussion as the insurers have identified new and more serious risks and they are pricing them accordingly. When so-called 100 year events are suddenly (or almost suddenly) happening at frequencies of up to multiple times per year or per decade in places, paying attention to why it may be so is worthwhile?

I’ll tag @AlanKirkland and @BrendanMays to assure your comment gets visibility.


The IPCC reports are prepared by world experts in their fields. However, Australia as has some excellent experts in the Bureau of Meteorology which report on changing Australian conditions in their State of Climate reporting. The current report is found here:

The BOM has also suggested that significant or extreme weather events haven’t been caused by climate change, but their severity has increased due to climate change. An example being a weather system would have likely otherwise caused a flood, but climate change increases rainfall intensity meaning flood levels are slightly higher than would otherwise have existed. Likewise with cyclones, the cyclones would probably have otherwise existed, but climate change resulted in potentially higher rainfall totals and wind speeds. Likewise with droughts, the droughts would have otherwise existed, but their severity or associated bushfire risk increases slightly with climate change.

With more Australians living in risk areas, either through development being allowed in riskier areas or to accommodate population increases, risks to property and exposure to/number of insurance claims has increased.

As a result weather impacts or insurance risks associated with owning properties has increased due to climate change and is what @AlanKirkland post is about.

Where insurance risks increase, premiums of those in areas where extreme events occur will increase to cover any potential claim costs. This is how insurance works.


I tend to agree with you. Climate changes that are being noticed by the gradual warming of the planet, a process that has been going on for over ten thousand years with the start of the current interglacial period, is not the cause of storms, or floods, or bushfires, or cyclones.

Those have always been around. It is due to weather. A mostly seasonal thing, with the occasional rare event outside the norm. Some may be classed as ‘extreme’.

Having said that, weather patterns are driven by the temperature differentials between polar regions and equatorial regions, and they are slowly changing due to warming oceans. In some places not good. In other places possibly beneficial.

However, insurance is driven by profit. If insurers make good money when income from premiums exceeds payouts from events, then others may jump in to get a piece of the profit. Typical supply and demand means premiums go lower due to competition on the supply side.

When payout events are more than expected, insurers lose money, and some depart and those who remain jack up the premiums. Again, supply and demand, but this time on the demand side.

I think you are looking at this from a rather narrow perspective and basing much of your argument on one quote from the IPCC and saying it relates to a multitude of issues that is not necessarily so.

The IPCC quote is one statistic applied to the region of Oz not an analysis of what is happening across the country that might affect insurance.

There are more causes and indicators of flooding than peak stream flow, for example flash flooding, estuarine and coastal flooding,

There are more causes of the growing costs of insurance than floods.

This regional fact sheet from the IPCC gives a more nuanced view of the multiple factors, including increase in extreme fire weather days.

No doubt insurance could be made simpler and fairer. You offer this as the explanation of the current situation but you give no evidence it is responsible for the current rise in premiums.

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Hopefully we don’t expend too much energy towards the reasons for the more impactful weather events.

We are unable to escape the reality that the data sets used to set past premiums have proven inadequate.

It’s a moving target. How does one redistribute the costs of risk across all insured? How does one provide equitable access to insurance to all property owners at a reasonable cost? IE No one left behind or denied affordable insurance.

Is the cost of the risk best apportioned by accepting insurance is a free market?
IE Lower risk properties pay less, higher risk pay more, highest risk become too expensive to insure, buyer beware. It’s a matter of bad luck if your current investment in a home suddenly becomes prohibitively expensive to insure. It could also halve in value because of the perceived risk to prospective buyers. If it is subsequently lost in a weather or related event, homelessness might await. Real not imagined looking to some owners who lost homes in recent decades due to flood fire or cyclones.

Or should the costs be one shared across the whole of the community - home owner and corporate/business?
Ultimately lost homes affect the whole of the community, it’s ability to be productive, and the bottom line value to the nation. It’s complex as relocation, improvement for resilience (updating), and subsidising are in the mix. There’s a compelling argument that the properties at risk, by location and or construction are only there because the whole of the community has facilitated that outcome. If not directly, indirectly by our choices of leadership in governments local, state/territory and of the Commonwealth, and their policies/decisions made.

It’s not a problem looking for a solution, IMO.
There are solutions. We’re just waiting for someone in leadership to put their hand up and accept responsibility for delivering them.


Thanks for the welcome @PhilT:smile:

I realise that I have been a bit slow to respond, but life sometimes gets in the way of good intentions.

The last time that I questioned an erroneous statement that @AlanKirkland had made about the climate, he responded with just a link to the 3,000 page IPCC AR6 report and left it to me to find the relevant paragraph. I thought that I would be a little more professional and include the precise section that contradicted @AlanKirkland ‘s claim.

You may not hold the IPCC reports in high regard, but @AlanKirkland certainly does …

The output from computer models of the climate is not the same as scientific facts and observational data, and cannot be reliably used as evidence of anything. CMIP6 consisted of the “runs” from around 100 distinct climate models being produced across 49 different modelling groups. The fact that the IPCC had to blend the outputs from around 100 models immediately tells you that not a single model is close to reality. It is well established that they all run way too “hot”. A good example of that inaccuracy is the “hiatus” that occurred from about 2005 for nearly a decade. None of the IPCC computer models predicted that pause in warming. None at all!

The scientific method relies on facts and data and is never determined by “consensus”. Consensus only applies to the assessment of opinions or beliefs, and never to facts.

Even if a “consensus” were relevant it certainly does not come from “most in the scientific community” The thoroughly debunked study by Cook et al (2013) covered 11,944 scientists that had submitted papers to the IPCC, and they found that less than 0.5% stated that humans were responsible for most of the warming. That’s a long way from “most in the scientific community”.

No, it is not a scientific journal, but Choice does claim to thoroughly fact check their journalism, which they clearly did not do in this instance.

If you are referring to the scientific data that supports @AlanKirkland ‘s claim that “the increased frequency and severity of extreme weather events like floods, bushfires and cyclones, driven by climate change“, then I think you will find that there is no such observational data in support of his claim.

In fact, if you look at the historical data since records began for “floods, bushfires and cyclones”, you will find that there is no discernible trend. Except for hurricanes/cyclones, where they are trending down slightly.

If you maintain that I am wrong, then please go ahead and prove me wrong by pointing me to the relevant long term scientific data.

That report says nothing about “the increased frequency and severity of extreme weather events like floods, bushfires and cyclones, driven by climate change” except to say that “There has been a decrease in the number of tropical cyclones observed in the Australian region.

The report also says nothing about the long term (since records began) trend in rainfall or streamflow. It only mentions streamflow and rainfall since 1975 and 1970, respectively. That suggests some “cherry-picking” of the data.

The BOM may have “suggested” that (although I could not find that suggestion anywhere) but they have not shown any data to support that suggestion. That doesn’t appear to be very scientific - it sounds more like an opinion?

Where is the scientific observational data that supports that example?

The paper that you have referenced says nothing about the frequency nor severity of floods. It talks about rainfall variations and says that “60 per cent of hydrologic reference stations around Australia show a declining trend in streamflow.“

Again, where is the observational data that supports that statement?

That BOM paper says “There has been a decrease in the number of tropical cyclones observed in the Australian region since at least 1982.“

There is nothing, that I could find, in that BOM paper about droughts.

Apologies I seem to have missed your qualification. I spent much of 1990 to 2010 working with scientists who did more than just think. That you seem oblivious to consensus modelling and forecasting (?) and cast it as a fault is telling.

If nothing there is risk management. If they are wrong money is wasted. If they are correct and dismissed as you appear to be doing, then what for the planet and life on it?

I’ll step back on this as I understand the scientists methodology, their data and modelling (pluses and minuses) having ‘been there’. @AlanKirkland gets my vote as pointing in a necessary direction even if bits are imperfect from time to time.


How does this support your contention that

the main issue is to make home and contents insurance simpler and fairer and easier to compare .

Are you still of the view that climate change is not responsible for floods in Oz because there is no measured increase is peak stream flow? Why?

The report says…

For bush fires:

There is a significant trend in some regions of southern Australia towards more days with weather that is conducive to extreme bushfires…Climate change affects the dryness and amount of available fuel through changes in rainfall, air temperature and atmospheric moisture content that exacerbate landscape drying. Increased CO2 in the atmosphere has the potential to increase the rate and amount of plant growth, which may also affect fuel load.

For floods and rainfall events:

Heavy rainfall events are becoming more intense…The intensity of short-duration (hourly) extreme rainfall events has increased by around 10 per cent or more in some regions and in recent decades, with larger increases typically observed in the north of the country. Short-duration extreme rainfall events (such as for hourly rainfall totals) are often associated with flash flooding, which brings increased risk to communities…As the climate warms, the atmosphere can hold more water vapour than cooler air can. This relationship alone can increase moisture in the atmosphere by 7 per cent per degree of warming, all other things being equal. This can cause an increased likelihood of heavy rainfall events, even in parts of Australia where average rainfall is expected to decrease. Increased atmospheric moisture can also provide more energy for some processes that generate extreme rainfall events, which can further increase the intensity of heavy rainfall due to global warming.

For cyclones:

Heavy rainfall events are typically caused by weather systems such as thunderstorms, cyclones and east coast lows. Daily rainfall totals associated with thunderstorms have increased since 1979, particularly in northern Australia. This is primarily due to an increase in the intensity of rainfall per storm.

In addition to these statements, the BOM report further details on other pages of their website.

The BOM has been clear in its responses to recent extreme weather events to correct statements made in the media. The media reports such like ‘climate change caused floods’, climate change caused bushfires/droughts’ etc. BOM have been consistent in their advice that climate change didn’t cause the flood, drought, bushfire etc as these events would have otherwise occurred through weather influences such as La Nina/El Nino and the Indian Ocean Dipole. The BOM have been very clear that severe weather events have become more extreme through atmospheric warming.

Such advice can be found in media releases, interviews with BOM personnel and in some weather event statements.

The State of Climate is a summary and there is more information available on the BOM website. In relation to droughts/Continental drying, the BOM has more detailed information elsewhere such as:

These changes measured by the BOM have the potential to impact on weather events.

Many weather events are becoming more extreme due to climate change/atmospheric warming. As Australia population increases and more dwellings are built in risk areas, the probability that more of the population is exposed to more extreme weather events increases. This increases risk of damage to property which affects insurance cover and premiums.


Thanks for the discussion here folks. A friendly reminder that the forum is not to be used for debating the existence of climate change, on this topic there is vast amount of work already completed and scientific consensus was reached some time ago. There are many places online to read and discuss climate change for those interested. As CHOICE accepts the current scientific consensus, we are working on addressing the effects that climate change will have on the consumer. As indicated above, this will also include our ability to access affordable, effective insurance. To read more about our research and to support our work around climate change and insurance, visit our website here: