Floods caused billions of dollars in damage, insurance premiums could spike

The SES received a record-breaking 900 rescue calls during the heartbreaking 2022 Victorian floods. Now, even those who weren’t affected could be. See how.

People can expect to pay more in insurance premiums as the Victorian floods come to an end and the costs start to add up.

AMP economist Shane Oliver said people across the country could expect to pay for the “hundreds of millions” of dollars worth of damage done to people’s homes, cars, businesses and properties in Victoria.

“If there are more claims somewhere in Australia we all end up paying for it because insurance is like a shared assistance mechanism,” he said.

“Insurance companies have to charge higher prices to replenish their reserves for next time there is a crisis.”

“That’s how it should be you don’t want people being destroyed by misfortune, we want to spread the burden around.”

According to the Insurance Council of Australia in 2022, more than 14,200 claims were filed relating to declared catastrophe or significant events in Victoria.

The costs incurred is estimated to be $450m.

Mr Oliver also said cost of living pressures on things like food would also likely remain for some time, even climbing a little higher as a result of the floods.

“It is yet again another disruption to the supply chain,” he said.

Insurance premiums and food are just the beginning of the overall cost of these floods with billions expected to be needed to fix roads.

Close to 1000 roads have been impacted by the floods and the Department of Transport has “worked around the clock” to repair over 100,000 pot holes in flood affected areas.

The floods are expected to have caused about $1bn in damage to the states roads and railways.

With some areas told to expect a six month wait to fix theirs.

In response to the October floods, the Victorian Government announced a $165m emergency road repair blitz.

To date, the Department of Transport has patched more than 110,000 potholes, undertaken more than 5100 individual road inspections, assessed 1617 bridges and attended a total of 36 landslips as part of the emergency blitz.

“Under this package, we’ve also commenced work on delivering more than $89.8m in larger-scale repairs, including road rebuilding, asphalt patching, structural repairs and cleaning and repairing roadside drains,” a spokesman said.

The State Emergency Service made a mammoth effort throughout the floods with more than 2000 SES volunteers coming from all over the country to support the flood effected towns.

“Some of our members lived in those towns and have lost their homes,” chief SES officer Tim Wiebusch said.

“We were also supported by LSV, Red cross and so many other community organisations.”

He said many people would still be out of their homes this Christmas.

“It is going to be a long road to recovery,” he said.

From October 12 until December 15 SES received 17,300 calls for assistance, 909 of them being for flood water rescues.

Mr Wiebusch said this was a record for Victoria.

Shepperton search and rescue had the most requests at 954, followed by Lilydale unit with 562 requests and Echuca with 525.

44 towns were evacuated and at least 1.5 million sandbags were used.

Mr Wiebusch urged Victorians to still be vigilant about the threat of floods.

“We encourage people to go to these towns and get tourism started up again but please just be careful, be aware of where you’re going,” he said.

“It won’t take much for our rivers to spill again.”

The agriculture industry has also been hit hard.

Figures from Agriculture Victoria have revealed more than $39m in hay has been destroyed, while more than $2.57m of honey has been lost — and that doesn’t include the more than 3000 damaged or perished beehives.

Almost 500,000 hectares of farmland has been flooded across Victoria, land equivalent in size to more than half of Melbourne.

At least 12,184 head of livestock have also been lost, with a further 1898 still missing and more than 321,153 hectares of crops have been lost.

Mr Oliver said despite the disaster being a “drop in the water” for the Australian economy everyone would end up contributing to the rebuild either through higher insurance premiums or through their taxes which will contribute to government assistance grants.