The state’s largest membership organisation is calling for greater investment in natural disaster mitigation measures and more resilient homes to reduce pressure on insurance premiums.

According to an RAA survey:

• 80 per cent of South Australians are becoming more concerned about the increasing frequency of natural disasters and the potential impact on their homes and properties.
• 63 per cent of South Australians would support greater investment in disaster mitigation measures to protect homes and properties from natural disasters like bushfires and floods.

The results have prompted the state’s largest insurer to reinforce calls for a number of measures that will better protect homes and communities from natural disasters and reduce pressure on insurance premiums, including: 

• Greater levels of funding for disaster mitigation to protect homes, communities and infrastructure by expanding the Federal Government’s $200 million Disaster Ready Fund to an indexed 10-year program.
• Divert revenue from the 11 per cent duties and taxes on general insurance products to disaster mitigation measures.
• Better land use planning to make sure homes aren’t built in high-risk flood and bushfire areas. 
• Update the National Construction Code to build more resilient homes and a commitment from the State Government to reflect resilience measures in our building code. 

RAA Chief Executive Officer Nick Reade says the increasing frequency and severity of extreme weather events was putting more homes at risk than ever before and putting pressure on insurance premiums.

“Even before the LA bushfires, eight in 10 of our members were already concerned about the impact of climate-related disasters on their homes,” Mr Reade says. 

“With more extreme weather events, we’re seeing the risk to homes and properties increasing – and that’s putting real pressure on the affordability of insurance across the globe.

“We don’t want a situation where the risk continues to increase to the point where insurance becomes unaffordable or inaccessible for some households. 

“When you look at the numbers, it’s quite alarming – 1.2 million properties in Australia have some level of flood risk and 5.6 million homes are at risk of bushfire.

“In South Australia, proposed changes to planning laws estimate more than 80 per cent of homes in the Adelaide Hills are at risk of bushfire and we’ve already seen the devastation the flood risk along the Murray River can cause.

“The Productivity Commission estimates 97 per cent of all disaster funding is spent on recovery and clean-up, leaving only 3 per cent invested into mitigation and resilience – we need to see a much greater balance in those figures.”

Mr Reade says diverting the 11 per cent tax on all general insurance products would drive greater investment in disaster mitigation, which would ultimately ease pressure on premiums in the long term.

“It’s a growing problem that requires leadership from all levels of government on multiple fronts.

“We need greater investment in disaster mitigation infrastructure, better land-use planning to make sure we’re not building homes in high-risk areas, and we need to build more resilient homes.

“Given South Australians are paying 11 per cent tax on all home and motor insurance policies in South Australia, we’d expect that funding to be diverted to disaster mitigation measures to protect those homes and cars.

“We have more than 825,000 members in South Australia, and our survey shows two thirds of respondents want more funding allocated to mitigation measures.

“We’re talking about investing in infrastructure like flood levees, better storm water management systems and bushfire prevention measures to help reduce the risk to properties and communities.”