Cyclone Alfred catastrophe declared as home insurance claims surge

Australians are dealing with another major weather event as insurers respond to damage from Tropical Cyclone Alfred. The Insurance Council of Australia (ICA) has declared it an Insurance Catastrophe, with more than 44,000 claims already lodged across Queensland and New South Wales.

"Right now, too many Australians are facing rising premiums, and many communities remain vulnerable to recurring risks, like flooding," said Andrew Hall, CEO of the ICA. "Insurance is part of the solution, but real change requires coordinated efforts from government, industry, and communities."

What insurers are doing in the wake of Alfred

Insurers have ramped up their response efforts to help customers recover. According to the ICA, insurers have:

• Reached out to over 250,000 customers with safety advice and claims information
• Increased claims staff to speed up processing
• Secured temporary accommodation for those who need it
• Brought in extra builders and suppliers to handle repairs faster

While fewer homes than expected suffered major wind damage, many claims are coming from flooding, stormwater damage and food spoilage due to power outages.

Why home insurance costs are going up

Home insurance premiums have risen sharply in recent years, especially in flood-prone areas. The ICA points to several reasons:

• More extreme weather is driving up claim costs
• Reinsurance prices are rising as global insurers factor in more risk
• State government taxes add as much as 30 percent to some policies

The ICA says more needs to be done to prevent disasters from causing such widespread damage in the first place. Their Advancing Australia’s Resilience policy paper calls for a $30.15 billion Flood Defence Fund over the next decade, shared between the Federal and state governments.

"Insurers stand ready to play their part in this important reform, but significant new government investment is the only way to reduce extreme weather risk and must underpin our future collaborative endeavours," Hall said.

The proposal includes:

• $15 billion for new flood defences such as levees, drainage systems, and barriers
• $5 billion for home and business upgrades to improve resilience
• $10 billion for buy-backs and relocations for properties in high-risk zones
• $150 million to strengthen older infrastructure

Hall says governments need to act now, rather than waiting for the next disaster. 

"Consumers cannot wait for mitigation and risk reduction programs to offer the critical protection and price relief needed," he said. "Immediate action is also essential – with tax and regulatory reform offering the best opportunity to ease cost pressure on insurance premiums in the near term."

What happens next

The ICA is holding a community information session in Ingham, Queensland, on 20 March. Locals can meet with insurers and industry representatives to ask questions, get help with claims, and better understand the recovery process.

The ICA is also continuing discussions with government agencies about how to better prepare communities for future disasters and keep insurance affordable.

If you’ve been affected

Here are a few tips to help you get back on your feet if you've been affected by Tropical Cyclone Alfred:

• Check safety updates before returning home. Hazards like unstable structures, contaminated water, and fallen power lines can be dangerous.
• Document any damage before cleaning up. Take photos and videos for your insurance claim.
• Look into financial assistance. Government disaster relief payments may be available through Services Australia.
• Be careful with repairs. Some contractors show up in disaster zones offering fast repairs. Check their credentials and talk to your insurer before agreeing to anything.
• Contact your insurer. If you need emergency accommodation or financial support, your insurer may be able to help.

For more information, visit the Insurance Council of Australia's website or speak with your insurer directly.

And if your insurer isn’t giving you the support you need, here are some of our favourite policies out there: