As the death toll from Victoria’s bushfires continues to rise amid warnings it could exceed 300, insurance companies and loss adjusters are still waiting to access the affected areas. Some residents have been allowed back to check their homes, but most affected areas remain out of bounds while police and military teams search for more victims.

While it’s still too early to estimate the likely insurance cost, initial estimates range from $250 million to $1.5 billion.

Most personal lines insurers have advertised special contact numbers for claimants, and some are setting up claims offices in towns around the affected areas.

Ratings agencies say insurers exposed to the bushfires – and North Queensland’s floods – should be able to weather the storm financially.

Fitch Ratings says recent rate rises and beefed-up reinsurance will help protect key players Suncorp and IAG, which share about two-thirds of Australia’s personal lines between them.
 
“Both IAG and Suncorp reduced single-event retentions in FY09 to $126 million and $150 million, respectively, from $200 million,” Fitch said in a statement.

“However, further protection was acquired through the purchase of aggregate reinsurance, providing an additional $150 million and $300 million in cover to IAG and Suncorp respectively, against the increased frequency of catastrophic events.”

Standard & Poor’s says the industry’s exposure to the Victorian bushfires is manageable under “robust reinsurance arrangements and capital support initiatives”.

Meanwhile, an insurance industry taskforce convened by the Insurance Council of Australia has spoken to Victorian Finance Minister Tim Holding.

The taskforce is understood to be seeking a meeting with retiring Victorian Police Commissioner Christine Nixon, who has been appointed to head an authority to co-ordinate bushfire recovery activity.

One major problem being addressed at present is the expected high number of underinsured and non-insured victims. Federal Superannuation Minister Nick Sherry has told the ABC the Federal Government will decide on what assistance will be provided.

“There are two categories of people here – those who are renting and I understand a substantial proportion would not have insurance for their personal possessions and there would be another group who are either underinsured or have no house insurance,” he said. “The detail of assistance there I’ll clarify with the Government.”

A senior lawyer quoted in The Age says the families of bushfire victims killed or injured trying to escape by road should lodge claims with Victoria’s Transport Accident Commission (TAC).

Meanwhile, the floodwaters in North Queensland are receding, allowing insurers to gain some idea of the extent of property damage that may be covered by policies. But the window of opportunity may be brief, with more heavy rain forecast for later this week.

InsuranceNEWS.com.au will provide updates through the week as new information comes to hand. We also want to hear from industry professionals with any information about the bushfires from an insurance perspective – whether personal or professional. Where the story deserves greater coverage, we’ll happily pass it on to the general media. Help us to ensure the industry’s work in the recovery process is properly recognised – call us on 03 9499 5538 or email editor@insurancenews.com.au.