‘Is this a typo?’: Unaffordable insurance premiums after floods

Victorians are facing unaffordable increases in flood insurance. How much companies have asked for will shock you.

Flood-affected Victorians have been hit with “ridiculous” insurance increases just weeks after their communities suffered devastating floods.

Georgia Hore, who moved into a new development in the Shepparton suburb of Kialla three years ago, was initially confused when she received a letter from her insurer saying her annual insurance, due to renew on November 26, had increased tenfold.

“I rang them because I thought: ‘that’s got to be a typo’.”

“I thought it had to be an error because who is going to pay $15,000 for flood insurance when we’ve just had the worst flood in history and haven’t been affected? It just seems ridiculous.”

When major flooding hit Shepparton in October, water inched up Ms Hore’s road and into her front yard, but did not affect her home.

The Weekly Times has seen correspondence sent by insurer Allianz to Ms Hore stating the annual cost of insuring her home would be $15,472 from November 26, a more than tenfold increase on her 2021 quote of $1380.

Ms Hore has since been able to obtain insurance through another company for a price similar to what she had paid in 2021, but was concerned other, more vulnerable residents may not understand their options.

Allianz did not respond to questions by The Weekly Times, but wrote in a letter to Ms Hore the increase was “as a result of a recent review of the flood risk at your property”.

Insurance companies have quoted Shepparton residents insurance costs that are hundreds and in some cases thousands of dollars higher annually due to flooding. Picture: David Crosling

According to new maps released by the Department of Environment, Land, Water and Planning in February, a portion of Kialla property, including a small band along the front yard, would be at risk of inundation in a one in 100 year flood event.

Independent Shepparton MP Suzanna Sheed said increases in flood premiums were “starting to emerge as people get their renewal notices”.

She had already been approached by some constituents whose insurance had increased in cost, including one whose annual bill had gone up from $1400 to $2100.

“There are already people (in Shepparton) who have no insurance. That shows you that the more expensive it gets, the more people drop out,” she said.

The Insurance Council of Australia has recorded more than 13,000 claims worth a total of $228 million as a result of flooding in Victoria, NSW and Tasmania so far this year.

An ICA spokesperson said insurance could become “increasingly costly … as the risk of extreme weather worsens”.

Shepparton MP Suzanna Sheed says there are already residents who can’t afford to pay for insurance. PICTURE: ZOE PHILLIPS

The spokesperson encouraged people to “shop around for cover that suits their needs” and said governments needed to do more to mitigate the damage caused by extreme weather events.

The ICA has called for governments to invest in retrofitting homes, build community levees and floodways and “in some extreme cases” buy back properties.

It has called on state governments to improve building codes and amend land use planning legislation to require planning approvals take extreme weather into account.

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