Insured losses from the Queensland and NSW floods have risen to $4.8 billion, making the disaster Australia’s third costliest extreme weather event on record, as claim assessments continue to be completed.
Close to 225,000 claims relating to the event have been lodged across both states, an increase of 3.6% on last month’s count, the Insurance Council of Australia (ICA) said today. The losses total has risen from a previous $4.3 billion.
ICA says insurance costs for the event have increased 12% on last month, driven partly by rising materials and labour costs. Almost 30% of claims have been closed and $1.5 billion paid to policyholders.
“Insurers are working hard to resolve claims as quickly as possible and have put on hundreds of extra staff to support claims processing as delays not only impact the policyholder, in most cases they also add costs to the insurer,” ICA CEO Andrew Hall said.
The floods swept through southeast Queensland and northern NSW in late February and early March, with this week marking four months since ICA declared the event an insurance catastrophe.
The General Insurance Code of Practice requires insurers to make a decision on a claim four months after it’s lodged, while allowing for changes to timeframes where they cannot be practically met due to issues including complexity or delays in getting reports from experts such as hydrologists and engineers.
ICA, which has this month held community forums in impacted areas, says many claims were not made until days, weeks or months after the initial event, and locations including Lismore were hit a second time at the end of March, generating many new or additional lodgements.
Mr Hall says past experience has shown that local councils need to be looking at what they can do to process the higher than usual number of development applications expected as a result of the flooding.
“The time it takes for some property claims decisions to be made has been a consistent issue raised at our policyholder forums in NSW and Queensland,” he said.
“There are clear obligations and regulations on insurers around claims, but ultimately the type of claim, the assessment required and the complexity of the repair or rebuild can impact that process.”
The catastrophe has overtaken 1967’s Cyclone Dinah as the third costliest natural disaster on a normalised basis, and losses have more than doubled those from the Brisbane 2011 floods.
Australia’s two costliest disasters are the 1999 Sydney hailstorm, with losses of $5.57 billion, and Cyclone Tracy, which caused losses of $5.04 billion when it hit Darwin in 1974.