An inquiry into insurance “gaps” on threatened coastal properties has been endorsed by Federal Climate Change Minister Greg Combet.

The agreement is contained in the Federal Government’s response to 47 recommendations made by a parliamentary committee on managing coastal zones and the impacts of climate change.

A report presented to Parliament in October outlined a growing concern in the insurance industry over the lack of cover for rising sea level damage, storm surges and corrosion.

“About 85% of Australia’s population lives in the coastal region and it’s of immense economic, social and environmental importance to the nation,” Mr Combet told media last week. “It’s crucial we work together to plan for the challenge of adapting to the impacts of climate change.”

Mr Combet says the coast is where most impact will be felt by predicted rising sea levels, storm surges and erosion.

He told Parliament the Government agrees in principle to a recommendation calling for an inquiry into related insurance issues, as well as an examination of insurance affordability, the existing and emerging gaps in cover and key actions suggested by insurer IAG and the Insurance Council of Australia.

IAG called in its submission to the parliamentary committee for the introduction of a coastal land value insurance scheme to manage risks in those areas.

This would mean the establishment of an insurance fund, which homeowners would contribute to in the form of a levy and which would be accessible for compensation if rising sea levels make their land permanently unusable.

An IAG spokesman told insuranceNEWS.com.au public discussion of the issue is important to increase community understanding of resilience to the impacts of climate change.

“Naturally we welcome discussions of these matters,” he said. “It’s appropriate that all three levels of government be included, as well as affected local communities and the insurance industry.”