Insurance industry calls for cross-border travel agreement ahead of wild weather season

The insurance industry is calling on state governments to agree on a Covid travel deal for construction workers to ensure quick recovery from catastrophic weather.

Prime minister Scott Morrison inspects the devastation and meets residents of cyclone ravaged Kalbarri, Western Australian. Picture: Adam Taylor

Insurers have warned Australia faces slower and far costlier recoveries from natural catastrophes while closed state borders remain in place.

Insurance Council of Australia chief executive Andrew Hall said the country had already seen the cost of closed borders clashing with catastrophic weather events.

Mr Hall said the looming summer, which marks the seasonal start of bushfires, hail storms, cyclones and wild weather was set to be worsened by restrictions that stopped workers moving freely between states.

The industry is calling on premiers to agree on a national approach to allow the movement of essential recovery workers before the peak wild weather season arrives. Insurers rely on teams of highly mobile and specialist assessors who are on the ground shortly after major disasters hit. At the same time repair works ranging from specialist panel beaters for hail damage to major construction jobs are sourced from across the country.

Insurance industry profitability

The warning comes on the same day the ICA released its report on the cost of the five declared insurance catastrophes that have lashed Australia since October 2020.

These catastrophes resulted in 134,000 claims totalling $2.28bn.

The Black Summer of 2019 into 2020 saw the insurance industry pay out almost $5.5bn across four natural disasters, including the devastating bushfires.

“But as if fire, flood, storms, cyclones and hail were not enough, many thousands have had to recover from such events within the context of a global pandemic and the impacts of lockdowns or lockouts by states in response,” Mr Hall said.

The insurance industry responds to catastrophe by mobilising resources to help communities recover quickly.

Insurance Council of Australia CEO Andrew Hall.

But Mr Hall warns any attempt to meet catastrophes in the coming months would be hamstrung by border controls and quarantine requirements.

“Floods and fires do not respect state borders. As it is likely that restrictions will remain in place for the remainder of 2021, it is essential that a national framework is agreed now so border restrictions do not unnecessarily add to the pain of those devastated by a natural disaster this spring and summer,” Mr Hall said.

“When a catastrophe strikes, communities impacted can’t afford to wait precious days or weeks for state authorities to work out under what rules essential emergency services workers and insurers need to follow to gain access.”

Mr Hall said Australians have already seen the consequences of border blockages when disaster strikes.

Queensland based Suncorp supported the ICA’s call, with chief executive Steve Johnston calling for a clear approach to avoid a repeat of labour shortages.

“It is vital that we have a clear and consistent national border approach as we head to natural disaster season to avoid repeating the issues of the past year during hailstorms in south east Queensland and floods across the eastern seaboard,” said Mr Johnston whose company is also behind brands GIO and Vero.

“Covid-19 has been hard for all Australians, but especially those whose homes and businesses have been devastated by natural disasters.”

“We must be able to help them get back on their feet as quickly as possible and give tradespeople and insurance specialists the confidence to move across borders to undertake repair work.”

The Halloween Hail Storm that struck south east Queensland in October last year saw $1bn in damage dealt to cars, homes, and solar panels.

However, Queensland’s hard border saw insurers struggle to mobilise trades and repairers to fix damaged homes and specialised auto repairs for hail damaged vehicles.

In its catastrophe report the ICA finds Australians are also facing a crisis of underinsurance, which is hampering recovery.

“Underinsurance is also driven by stamp duty on insurance, a retrograde revenue measure that numerous inquiries and reviews have found leads to household underinsurance or non-insurance,” the report said.

The ICA said taxes and charges levied on insurance policies pushed insurance further out of the reach of those who need it.

“Government taxes and charges can range from 20 to 40 per cent on top of the cost of the premium, depending on the state or territory,” the report said.

Originally published as Insurance industry calls for cross-border travel agreement ahead of wild weather season