The Insurance Council of Australia (ICA) has called on the Federal Government to provide a $250 million annual fund to pay for buy-back and home-raising projects.

In a pre-budget submission, ICA says state and territory governments should match the funds to provide a $500 million commitment to move upwards of 750 families out of flood danger zones each year.

Governments have already provided $1.6 billion in jointly funded projects to buy back at-risk properties, with around 1300 homes purchased across Queensland and NSW. But ICA says further support is needed.

“The major flooding events over this summer and back to 2022 have demonstrated the scale of the challenge Australia faces in responding to extreme weather events, and why more investment is urgently needed to better protect Australian lives and properties,” ICA CEO Andrew Hall said. 

“While there is no one solution that would immediately work to counter these factors, collectively the measures outlined in our pre-budget submission work to relieve upward pressure on premiums by reducing risk, which is the ultimate driver of insurance costs, and so support the community’s need for action on cost of living.”

The proposed fund would act separately from the $200 million-a-year Disaster Ready Fund, which ICA says should be extended to a 10-year rolling program.

ICA also appeals for a $5 million annual investment in risk management for sectors experiencing a higher frequency of personal injury claims. 

And the submission includes renewed calls to address vehicle repair costs, reform land planning and building codes, and for the federal leadership to provide better incentives to state governments to remove insurance taxes.

“This submission sets out the areas of policy that insurers have identified as requiring reform, modernisation, or investment, and is the result of collaboration and consultation not just across the membership of the Insurance Council, but with stakeholders and policymakers across the country,” Mr Hall said. 

“The Insurance Council has long advocated for policy solutions to reduce risk in Australia, including improved land use planning, better building standards, and investment in community mitigation infrastructure and household-level risk mitigation.

“Action in these areas would ... reduce the risk to individuals and communities and, in turn, reduce pressure in the insurance system.”

The federal budget is set to be delivered on Tuesday, May 14.

Read ICA’s submission in full here.