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Weathering the storm: Insurance in a climate crisis

August 2023


As climate change increases the frequency and severity of extreme weather events like bushfires, floods, storms and cyclones, a broken insurance market is failing to cover the risks of these events fairly and affordably.

The report, commissioned by CHOICE, Climate Council, Financial Rights Legal Centre, Financial Counselling Australia and the Tenants Union of NSW explores the role of the insurance market in responding to these complex issues.

The research revealed five key problems with the home and contents insurance market:

  1. Complex product design: Home and contents policies are complex and difficult to compare across insurers, often leading to people being unintentionally underinsured.
  2. Unaffordable premiums: At their most recent renewal, 87% of policy holders have seen their premiums rise. Insurance unaffordability is worse in disaster-prone areas, and many households on low incomes have been priced out of the insurance market completely.
  3. Inaccessible information on natural hazard risk: Finding information on the level of risk to your home is very difficult, and the information that is available is piecemeal and often inaccurate.
  4. Actions by homeowners to mitigate risk are not being considered by insurers: 44% of policyholders would consider investing in measures to lower the cost of their premium but many insurers do not recognise these kinds of measures when pricing policies.
  5. Housing in high-risk areas needs solutions beyond insurance: When homes are no longer insurable or safe to live in, governments need to plan for other solutions, including relocation.

Download the report (PDF)

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