The Insurance Council of Australia (ICA) is intensifying its opposition to the Natural Disasters Insurance Review (NDIR) proposal to introduce compulsory flood cover.

It says in a statement that mandatory flood cover won’t fix the issue of inundation in areas that are subject to frequent flooding.

CEO Rob Whelan has called on the NDIR “to give serious consideration to appropriate mitigation in flood-prone areas, especially in Queensland and Victoria”.

He says forcing all Australians to pay for flood cover in high-risk areas will not stop disasters such as the January floods in Queensland and Victoria happening.

“We need to reduce the risk to properties to ensure Australians do not lose their homes in the first place,” he said. “Only 7% of Australian properties are currently in flood-prone areas.”

Mr Whelan predicts the Federal Government would have difficulty selling an increase like this to the 93% of Australians who are not affected by flooding.

ICA and its member insurers are opposing mandatory flood cover for fear it will stop Australians insuring their properties and effects.

The council cites this as a reason as to why mandatory flood cover wouldn’t work.

“This increase could become a serious burden on Australian households; it is unnecessary and would only put further stress on consumers,” Mr Whelan said.

“The industry already provides flood cover to properties throughout Australia with more than half of all home policies offering cover, which will increase to eight in 10 policies by 2012/13.”

ICA is continuing to argue for a national land policy to stop homes being constructed in flood-prone areas.

“An agreement must be reached that does not allow residential property to be constructed on at-risk land unless there is strict enforcement of development controls that reduce the risk to less than a 1:100 year return period,” Mr Whelan said.

“I urge the [NDIR] to give more careful consideration to our proposals, we need to treat the cause not the symptoms.”