Insurers say homeowners need to know upfront if their properties are at risk of flooding

The nation’s leading insurance company says people should be told upfront if their properties are at high risk of flooding.

Insurers believe homeowners should be told upfront whether their properties are at imminent risk of flooding before they buy.

Amid devastating floods which have ravaged the east coast, Insurance Australia Group (IAG) says more needs to be done to alert residents of potential flooding and natural hazard risks.

IAG executive of natural perils, Mark Leplastrier said banks, governments and other institutions needed to be more direct about associated disaster risks before residents committed to buying or renting.

He said protocols relating to construction or home ownership were “out of step” and relied on the insurer to tell customers about potential natural hazard risks after a building had been built or a property bought.

Insurance Australia Group says more needs to be done to alert residents of potential flooding and natural hazard risks before financial commitments are made. Picture: Mick Tsikas/AAP

“It seems a bit crazy to me,” Mr Leplastrier said.

“You would think it would be part of purchasing a house or renting a property. You would think you should be well informed what you are taking on.”

Insurers will increase premiums on properties and homes that have a higher susceptibility of being damaged from a natural disaster.

Mr Leplastrier said there needed to be better co-ordination to identify underlying risks at a property and planners should factor in extreme weather events.

“Landplaning and building codes need to focus on (structural) resilience and not just life safety,” he said.

“Insurers need to start working with building industry groups to start to do something about resilience.”

IAG says building and land planners should factor in structural resilience. Picture: NCA NewsWire/Jeremy Piper

IAG is the country’s largest general insurer for home and contents, and owns brands such as NRMA, SGIO and CGU Insurance.

Rival insurer Suncorp on Thursday revealed it has received more than 5400 claims across New South Wales, Queensland and Victoria since the beginning of the flooding crisis.

The majority of claims lodged were in NSW with 85 per cent relating to property damage.

IAG confirmed it had received 7383 claims from the flood.

Suncorp chief executive Steve Johnston is urging state governments to give insurers and tradespeople essential workers rights, so on-ground assessments of the damage and repair work can start.

“We are committed to getting our customers back on their feet as soon as possible so it is important that we can get assessors and repairers on the ground to affected regions quickly given the magnitude of this event,” Mr Johnston said.

Suncorp says it has received more than 5400 claims. Picture: Annette Dew

When speaking with NCA NewsWire, Mr Leplastrier warned flooding and storm events were likely to become more frequent and severe due to a warming climate.

IAG claims climate change factors can change the underlying hazard risk of an area and would make it more expensive to insure certain properties that are more susceptible to natural disasters.

Mr Leplastrier said a temperature rise of 3C would likely cause a 50 per cent increase in the national cost of acquiring home insurance.

But noted the impact would be “disproportionate” to areas of the country that are more prone to disasters such as hail events, coastal storm surges, flooding and bushfires.

“What is very clear is there is going to be very disproportionate impacts across the country,” he said.

“Events like we have just had are more likely than not (to) be more intense going forward with a warmer climate.”

IAG also believes more severe hail storms covering larger areas than before will influence the future price of home and contents insurance.

Originally published as Insurers say homeowners need to know upfront if their properties are at risk of flooding