Queenslanders fail to insure for flood despite lessons of the past

Source: Brisbane Times

As Queensland counts the cost of its second major flood in as many years, figures have come to light revealing the state has the greatest percentage of residents without flood insurance.

A survey used in the Industry Advisory Group's June 2012 submission to the Productivity Commission’s review of each state's response to natural disasters showed almost 40 per cent of Queensland homes were not insured against floods, despite the state's disasterous experience in 2010-11.

Of the 1200 Queenslanders surveyed for the report, 38 per cent said they did not have any flood insurance.

Western Australia was next in line for the most amount of people without flood insurance (37 per cent) followed by South Australia (32 per cent), Tasmania (31 per cent), New South Wales (29 per cent), the ACT (16 per cent) and the Northern Territory (10 per cent).

Griffith University environmental economics lecturer Alex Lo said the figures were surprising, given the widespread flooding Queensland suffered in the summer of 2010-11.

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However, Dr Lo said many residents would have been of the view that the state would not be hit again so soon.

‘‘They think it is a one-in-100-year flood, so they think it is not going to happen at least in the next 100 years,’’ he said.

Dr Lo said they failed to understand that a one-in-100-year risk referred to the likelihood of a flood occurring in any one particular year, not every 100 years.

He said people looked at the experience of their friends and families when deciding whether or not to buy flood insurance.

‘‘If they think that those people would encourage them to have flood insurance, those people are more likely to have flood insurance,’’ he said.

The Insurance Council of Australia last night said its research in September 2012 showed the proportion of policies offering flood cover had increased from 3 per cent in 2006 to almost 80 per cent in 2012.

A flooded home in Bundaberg. Photo: GETTY IMAGES

A flooded home in Bundaberg. Photo: GETTY IMAGES


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