Home insurance: Experts call for fire prevention to be subsidised

As bushfires continue to burn in Western Australia, the question of fire prevention has once again come to the fore. Although for many it never really went away.

Just last week a body representing local councils in Queensland requested that the Federal government create a national reinsurance pool to help keep insurance premiums down in Australia. 

Now academics from the University of Tasmania are calling for the government to subsidise fire prevention costs. In an article in The Conversation, Professor of Pyrogeography and Fire Science David Bowman said that asking people to prepare for fires is pointless if they don’t have the money, capability or time to do it.

Instead he said, “What if we had a system, like Medicare, where the cost of these fire prevention measures was subsidised by the public system?”

Fire prevention isn’t always easy

When it comes to fire prevention, emergency services and local governments will give residents advice on how to ‘prepare’ their home in case of a fire. For example, some advice given by the Department of Fire & Emergency Services in WA includes pruning shrubs, cleaning out gutters and making sure that gas release valves face away from the property.

This is all fairly standard advice. However, Bowman says that passing the responsibility on to individuals is not good enough. He says there are a number of reasons why people don’t prepare.

“If you’re not physically able to get up a ladder to clean your gutters or mow around your property and remove fuel load - and you can’t afford to pay someone to do it - what are you supposed to do?” he says.

Being underinsured is a problem

In 2019, research from MCG Quantity Surveyors found that a large number of homeowners were underinsured by as much as 66%. Being underinsured means that a property is insured for less than it would actually cost to rebuild it - should anything happen.

So unless an insurance provider offers an underinsurance safety net, a homeowner could be left significantly out of pocket come claim time.

Underinsurance isn’t the only problem either as a large number of homes in Australia have no insurance at all. According to Sunshine Coast Council Mayor Mark Jamieson, around 62,000 homes in North Queensland do not have insurance.

However, academics from the University of Tasmania and the Swiss Federal Institute of Technology Zurich say that telling people to get more insurance is not necessarily the answer.

"More insurance may help renters and homeowners. But to decide how much more, you need access to accurate rebuild or valuation costs," according to Senior Lecturer in Human Geography and Planning Kate Isabel Booth, Research Fellow in Geography, Planning and Spatial Sciences Chloe Lucas and Senior Researcher Christine Eriksen.

“Accessing, understanding and keeping up to date with complex knowledge about risk and construction is beyond the capacities of many who already live busy lives,” the group reports.

Reducing risk: Looking forward

Calls for the government to subsidise fire prevention are not new. In a report commissioned by the NSW government last year, it was recommended that the government consider introducing subsidies to help property owners reduce bushfire risk.

It remains to be seen what the Federal and state and territory governments will do about fire prevention in the near future. 

In the meantime, if you are worried about your home being underinsured why not check with your provider to see whether they offer a safety net or not.

Or if you’re thinking about switching plans, head to Mozo’s compare home insurance page, or check out the options below.