Mortgage borrowers may face compulsory flood insurance rules
Westpac is considering the idea of requiring home loan customers to take out flood insurance as standard should they live in flood-prone areas.
Speaking at the Senate inquiry into banking sector competition, Westpac human resources chief Peter Hanlon confirmed the bank was looking into the possibility of making flood insurance compulsory in such circumstances in a bid to reduce its risk exposure to future crises.
"It's not the practice in Australia at the moment but it is something we are looking at," he said.
The revelation comes after a report by Goldman Sachs, which was obtained by The Australian, recently predicted there could be defaults on $4.1 billion worth of home loans, or about 16,500 homes, in Queensland's south-east following the recent disaster.
Borrowers concerned about their financial options could choose to compare home loans and consider refinancing. According to Goldman Sachs' preliminary research, up to 67 per cent of houses and businesses damaged in the floods had no insurance or flood coverage.
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