The Federal Government has criticised the insurance arrangements of the NT, Tasmanian, Queensland and NSW governments.

It follows a report by the Department of Finance and Deregulation, which reviewed the insurance arrangements of states and territories under the Natural Disaster Relief and Recovery Arrangements (NDRRA) determination.

Attorney-General and Minister for Emergency Management Nicola Roxon says “more can be done” to ensure adequate financial arrangements for natural disasters.

“While the insurance arrangements that states and territories have in place to fund post-disaster reconstruction are generally sufficient, the report finds that improvements can be made and further work is required in respect of road assets,” she said.

The report follows amendments to the NDRRA after last year’s floods. All states and territories are now required to have their property insurance arrangements independently assessed and to publish the outcomes.

It criticises the NT Government for not having appropriate insurance for its assets and says it must now test the market and complete a cost-benefit analysis to “make a fully informed decision on the purchase of cover”.

The report says 10 local governments in the NT do not have flood cover for their assets.

The Tasmanian Government is also criticised for not having appropriate insurance for its assets and has been called on to take the same steps as the NT.

Queensland has appropriate cover for its non-road assets after the start of its insurance arrangements on November 1 last year, the review says. But four of its local governments – three of which are identified as having a high flood risk – lack flood cover for their assets, with no evidence of market testing for the availability of insurance.

NSW has appropriate arrangements for its non-road assets but one of its local government mutual pools – Statewide Mutual – does not provide flood cover for local government members’ assets and no evidence of market testing has been given.

SA has appropriate insurance arrangements for its non-road assets, while WA, Victoria and the ACT are praised in the review for having appropriate arrangements for all assets.

The report says roads constitute 31% of all declared state and territory assets but Victoria and the ACT are the only jurisdictions with insurance cover for their roads.

It concludes the appetite and capacity of traditional insurance arrangements for road assets is insufficient; non-traditional insurance options are limited in their availability and are not cost-effective; and at present risk transfer options for road infrastructure may not be a viable solution for all jurisdictions in Australia.

The report raises the idea of a national pool approach to road assets but does not make any recommendations for funding road asset damage, instead concluding that further options need exploring.