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| Gailes Caravan Park during 2011 flood. |
FLOOD insurance remains unaffordable for those who most need it, says the expert who was commissioned by Canberra to fix the issue after the 2011 crisis.
John Trowbridge, who conducted the National Disaster Insurance Review, said the industry had moved quickly to make flood cover more available but the Federal Government had done nothing to improve affordability.
"The availability problem has been solved, and that's good," he said.
"The insurance industry, at its own initiative, has solved that problem. But the affordability problem, clearly, is not solved."
Mr Trowbridge found there were about 150,000 homes in Australia at risk of flooding more than once every 100 years and about 50,000 with a one-in-20-year risk.
People were already being asked to pay high prices and many in the highest-risk areas were choosing not to take out flood cover, he said.
"The risks are that there will be another flood and that there will be another swag of people who don't have flood cover and will have disputes with their insurers," he said.
Mr Trowbridge said it was in the Government's own interests to adopt the scheme of premium discounts and a publicly funded reinsurance pool that he proposed in his review - which, he said, could be designed not to cost anything unless there was a flood.
"I would advocate government has a wider look at all the support programs that it runs when there's a disaster," he said.
"Government pays out a lot in hand-outs. I believe it's better to do that through insurance."
The Government deferred decisions on most of Mr Trowbridge's 47 recommendations, which it has had since September 2011, pending a Productivity Commission report on climate change.
A spokesman for financial services minister Bill Shorten said the Government had the final report from the Productivity Commission and was considering its response.
Mr Trowbridge said the Productivity Commission had previously taken a "dry economic approach" to his proposals and opposed premium discounts on the basis they would distort the market.
His key recommendations include:
- All home insurance to include flood cover
- Discounted premiums in areas of medium and high flood risk
- National co-ordination of flood risk measurement and mitigation
- Mechanism to fund the premium discounts
- Insurers get access to Government-sponsored reinsurance facility.
www.CourierMail.com.au
10.1.13
