22% of NSW & QLD Residents Uninsured Against Extreme Weather Events

With Australians in NSW and Queensland heavily affected by recent flooding, the question remains if people are adequately insured?

Last updated on May 18th, 2022 at 10:40 am by Adrian Edlington

Savvy’s 2022 representative survey of 1000 New South Wales & Queensland residents learns about insurance cover of everyday Australians, their experience with extreme weather, perception of risk and beliefs regarding the cause of recent extreme weather events.

Highlights:

  • 21% of NSW and QLD residents have made extreme weather insurance claims
  • Two thirds more worried than not extreme weather events will negatively impact insurance affordability
  • 40% with home & contents insurance paying $1001-$1500
  • 35% of residents blame climate change for ongoing weather disasters
Water across road sign, in front of water covering a wide road.

A new 2022 survey of 1,000 New South Wales and Queensland residents has shown that approximately 22% are uninsured against extreme weather events such as flood, bushfire, or storms.

The survey, commissioned by Savvy, examined attitudes and insurance rates among 1000 NSW and Queensland residents, many of whom are currently facing significant flooding and property damage.

Savvy 2022 Extreme Weather Insurance Survey Infographic

21.3% of respondents said that their homes had been affected by severe weather events to such an extent they had made an insurance claim. Of those that had made a claim, the largest proportion was for storm damage (124 respondents), followed by flooding (93 respondents).

Of the remaining 787 who hadn’t made an insurance claim, 177 stated flooding had affected their home since they had lived there, 150 had been affected by damaging winds, while 55 had been affected by bushfires. 

When it came to insurance, 54% said that they had taken out Home & Contents insurance; 8% only for their homes, and 15.5% only for contents.

What do you believe is the cause of the recent extreme weather events on the East coast of Australia?

 

Has your home been affected by current floods, bush fires or extreme weather events to the extent you have needed to make an insurance claim? 

Base Sydney Rest of NSW Brisbane Rest of QLD
Yes
21.3% (213)
84
49
47
33
No
78.7% (787)
315
166
143
163

Almost two thirds (61%) of respondents said that they fear these ongoing weather events will negatively impact home insurance affordability. 16.4% of respondents said their insurance premiums rose by up to 5%, with a further 16.4% reporting an increase of up to 10%. 32.2% of respondents said they have stuck by their insurer for more than five years.

Which of the following insurance products do you have for your home?  

Perceptions of risk vs calculated risks

Discrepancies exist in the perceptions of risk between calculated risks by data collection and insurance firms.

Cyclone risk

22.7% of total respondents living in Queensland said they were of “No” or “Low” risk to exposure to Tropical Cyclones, while an Insurance Australia Group (IAG) report on natural perils said that Brisbane’s exposure was “High”, while that of regional QLD to cyclones was “Medium.”

Bushfire risk

22.2% of Brisbane and Sydney residents said they had “No” exposure to bushfires, while a further 23.4% agreed that their property had a “Low” bushfire risk. However, the IAG report shows a “Medium” risk for Sydney and a “Medium” risk for Brisbane, suggesting that residents in these capital cities significantly underestimate their exposure to bushfires.

Flood risk

In terms of flood, 44.1% reported a “Low” risk, while the IAG report showed a “High” to “Medium” risk for NSW (metro and regional) and a similar risk for Brisbane and regional Queensland.

What is your current annual Home Insurance Premium?

What is your current annual Contents Insurance Premium?

Bill Tsouvalas, Managing Director of Savvy;

“There is a definite gap between what’s been recorded by experts and captured by real world data relative to the perceptions of those risks among the general population,” says Savvy CEO Bill Tsouvalas. “The gap between reality and perception may mean people will underinsure rather than seek out adequate coverage, which could devastate families caught in extreme weather events who lose everything.”

What is your current annual Home & Contents Insurance Premium?

Blaming it on the weather?

As for what is driving these extreme weather events, 35.1% said the recent floods and storms are a result of human-caused climate change; 27.3% said it’s a result of being in the La Niña “cool” phase of the El Nino-Southern Oscillation variation. 22.8% reported that the extreme weather was simply “unpredictable.”

Younger people were much more likely to cite climate change as the reason, while older people pinned the events on La Niña or simply “unpredictable extreme weather.”

a) For what reasons have you made a home insurance claim in the past five years relating to natural disasters?

Total Sydney Rest of NSW Brisbane Rest of QLD
Total People
213
84
49
47
33
Flooding
93
39
16
27
11
Storm Damage (including
wind and water damage)
124
50
30
25
19
Fire Damage
11
3
5
1
2
Cyclone Damage
2
-
-
-
2
Other
7
1
3
3
-
None
23
8
6
6
3

b) If no claim was made – Which of the following extreme weather events have affected your current residence since you’ve lived there?

Total Sydney Rest of NSW Brisbane Rest of QLD
Total People
787
315
166
143
163
Flooding
177
66
36
31
44
Bush fires
55
22
25
3
5
Coastal erosion/ king tides / storm surges
25
10
5
2
8
Damaging winds / Cyclones
150
54
31
21
44
Earthquakes
6
2
3
-
1
Other
7
1
3
3
-
None
471
192
97
93
89

For more information, contact Adrian Edlington – [email protected]

Sources:

  1. Savvy’s Extreme Weather & Insurance survey (n=1000), March 2022.  
  2. IAG Report – Table 3, Regional GDP, Population, 2014-15 and Natural Perils Risks, pg. 5. https://www.iag.com.au/what-cost

About Savvy

Savvy is one of Australia’s largest online financial brokers, focusing on personal and commercial financial products. Founded in 2010, the firm has seen rapid growth, a testament to their provision of market leading rates and reaching customers with the latest in media and technology. Savvy is a proud supporter of Kids Under Cover, a charity assisting homeless and at-risk youth to strengthen their bonds to community and education. Savvy was named one of BRW’s fastest growing companies in 2015.