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Disaster-prone Australia needs more than just insurance: Honan

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Home insurance cannot continue to be the only answer when natural disasters strike, and there must be greater government action taken to prevent further flooding, Honan Insurance says.

Governments need to implement risk management strategies and ensure further town planning in flood-prone locations is managed appropriately, Honan says, while planning laws, building codes and government buyback schemes for those in high-risk areas “must also be considered”.

Honan National Head of Corporate Insurance and Risk Solutions Poppy Foxton says insurance has become the first port of call in a disaster, but as a result the cost of cover continues to rise, with many homeowners no longer able to afford cover.

“With the increasing likelihood of future flooding, more government action on wider climate change issues is required to tackle the root of the problem – lessening the long-term dependence on insurance,” Ms Foxton said.

“After the recent east-coast flooding, and the loss and damage to people’s homes, the extent of this and the number of claims is now surfacing.”

Record flooding this year has seen the number of insurance claims in floodplain areas continue to skyrocket, resulting in more than $5 billion in insured losses, Ms Foxton says. Options for insurance in flood-prone areas will continue to pose affordability issues in the year ahead, Honan says, and more should be done.

The Insurance Council of Australia is also calling for increased government investment to improve resilience.

CEO Andrew Hall said resilience was “top of mind” at Welcome Back to Parliament drinks in Canberra last week.

“For many the penny has dropped and they now agree it is time for meaningful and practical measures that better protect Australian homes, businesses and communities. This means resilient homes, better mitigation, and a thorough review of land-use planning,” he said today.

Newly-elected Prime Minister Anthony Albanese recently said floodplain use and development in flood-prone areas was “something that governments need to look at going forward”.

"You can't continue to commit the same issues and wonder why you get the same outcomes,” the Prime Minister said.

NSW Premier Dominic Perrottet, who will soon release of the NSW Government’s independent flood inquiry into floods, has committed to doing "everything we can to make sure we don't make the mistakes of the past”.

“Development on flood plains – not only does that cost and risk lives but impacts on properties, homes and businesses,” he said.