Expanding the Federal Government’s $1 billion Disaster Ready Fund to include funding for household-level mitigation works in areas prone to catastrophes would lead to “positive effects” on insurance premiums, the National Insurance Brokers Association (NIBA) says in a pre-budget submission.

The broking peak body says it supports the fund, which was created by the Albanese Government to provide up to $200 million annually over the next five years from 2023/24 in public disaster prevention projects such as seawalls and firebreaks.

However, the proposed works that are to be covered by the fund are “only one part of the puzzle”, NIBA says in its pre-budget submission to Treasury. Treasurer Jim Chalmers is expected to hand down the 2023/24 budget in May.

“For many communities, public mitigation works will have little impact on improving resilience to natural disasters, for example, communities that are regularly impacted by tropical cyclones.

“In these cases, household-level mitigation works, otherwise known as private mitigation, are an effective alternative.”

NIBA says the increasing frequency and severity of natural disasters has highlighted the need for individuals and communities to take proactive measures to protect themselves and their properties from damage.

Yet the cost of these mitigation works can be “prohibitively” high for many homeowners and small businesses, leaving them vulnerable to the impacts of severe weather events.

NIBA says funding support for private mitigation works could include installing a sprinkler system for fire defence purposes; raising windows above flood levels; and replacing existing roofs with materials that meet current building standards.

“Such a program would have a number of positive outcomes including… reducing the overall financial burden on insurers which is passed on to policyholders in the form of higher premium,” NIBA says.

NIBA says previous mitigation programs have demonstrated that they can have a positive impact on insurance premiums.

It says in northern Queensland, homeowners who participated in the Household Resilience Program, which provided grants to homeowners for the purposes of undertaking cyclone resilience works on their property, have saved more than $300 on their insurance premiums.

Click here for the submission.