Calming Mother Nature

Two years on from Queensland’s summer of disasters, the Federal Government announced a $100m two-year package for national coordination of flood risk mitigation projects the length of the eastern coastline.

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While specific projects are the immediate priority, the new National Insurance Affordability Council will also make recommendations on other mitigation initiatives and act to reduce insurance premiums for natural disasters.

Perhaps heeding the call from industry last year for a nationally integrated approach to natural disaster mitigation, the Council will also ensure government action in flood mapping aligns with insurance industry needs and assists in the goal of reducing premiums.

“Average insurance premiums in Roma are currently around $3000,” said Prime Minister Julia Gillard.

“The construction of a flood levee by the Goondiwindi Council reduced insurance premiums by an average of 33 per cent.”

“This is almost triple comparable premiums in nearby Charleville, which has a flood levee, of around $1200. Suncorp has estimated that the construction of a flood levee by the Goondiwindi Council reduced insurance premiums by an average of 33 per cent.”

The Federal Government is also hoping state and territory governments will come to the party with their own funding but meanwhile, what can consumers do to mitigate their natural disaster risk and reduce their premiums?

Dousing the flames

No Australian summer is now complete without bush fires, burn-offs and extreme fire danger warnings. People in areas with fire hazards are encouraged to contact their local fire control centre for advice about mitigating risk that fire spreads to their property.

The NSW Rural Fire Service points out that reducing available fuel does not have to be as drastic as removing all vegetation because “trees and plants can provide you with some bushfire protection from strong winds, intense heat and flying embers”.

Often clearing bushfire fuel by hand or with machinery is a better option than burning it.

The NSW Rural Fire Service recommends residents rake and remove fallen leaves, twigs and bark on a regular basis, along with mowing grass and keeping it green and well watered.

“Trees and plants can provide you with some bushfire protection from strong winds, intense heat and flying embers.”

Trees and shrubs should be removed or pruned selectively, retaining some vegetation as windbreaks and radiant heat barriers.

Slashing and trittering (also known as turbo mowing) is an effective method of reducing fuel loads but the cut material must be removed or allowed to rot before summer starts.

Meanwhile, ploughing and grading can produce effective firebreaks but the areas will need continued maintenance.

Heads above water

Local councils provide up-to-date information about flood risks, says Dale Garbett from Vero.

“However, if a client is in a flood-prone area, a key consideration is keeping personal and business documents offsite and insurance policies handy, but also to have a plan.”

“This can include having sandbags ready for flash flooding, not touching electrical items, and switching off utility supplies if you get flood warning.”

Garbett adds that after the flooding, further damage can be minimised if ventilation is encouraged by leaving windows and doors open.

Much depends on the location however. Garbett recently worked extensively with Godfrey Hirst, a carpet manufacturer situated on the Barwon River in Victoria’s Geelong.

The premises flooded in 1995, prompting the company to make design and construction of a perimeter floodwall a priority capital expenditure.

“The site housed raw materials and finished goods in various stages of production, and it was exposed to floodwater from the river on two sides, as well as stormwater flow,” Garbett says.

“They were quite a proactive company and the wall was well engineered to withstand pressure from accumulated water, but it was identified that the procedure to seal and sandbag floodgates was excessively labour- and time-intensive.”

“The wall was well engineered to withstand pressure from accumulated water, but there was a weak point in the seals of the concrete floodgates.”

Godfrey Hirst worked closely with Vero to develop a simple sealing system so it could respond to fast-rising flood waters. The sealing system also had to retain the integrity of the wall for the time necessary for floodwater to subside, and develop continuity plans in case there was a problem, such as leasing to another plant nearby in a flood-resistant area.

“It was not so much a premium issue as just getting a good level of flood cover at a reasonable rate without huge exclusions or higher premiums,” explains Garbett.

“There may have been a saving of say $100,000, more to enable peace of mind and protection and to trade with confidence.”

For consumers’ home and contents, the principles are the same, says Bartels.

“Be proactive, and don’t just rely on insurance recommendations. There are no real standards but guides on assessing flood risk and developing plans.”

However, Garbett points out that after the Queensland 2011 experience, floods and storm risks really do have to be discussed together.

Stormy weather

Martin Weatherhead, head of Suncorp Insurance, warns that with 1500 severe storms recorded in 2012 alone, they are the one natural disaster every Australian should be prepared for.

Suncorp recommends a number of mitigation strategies. These include regularly checking gutters and downpipes, as congested pipes can send water flowing indoors during heavy rains.

It is also important for home and business owners to ensure their roofs are sound, with no loose or damaged tiles or raised corners of corrugated sheets.

They should also regularly trim overgrown tree branches, unless they are near powerlines, and secure loose items in and around the garden – outdoor furniture, toys, tools and sporting equipment can be blown about and cause serious damage.

“Customers who have appropriate mitigation strategies in place generally see a marked difference in their insurance premium,” Weatherhead adds.

Making insurance more affordable

At the end of February, the Prime Minister announced the National Insurance Affordability Initiative with a $100 million investment over two years to reduce natural disaster risk and, as a result, insurance premiums.

A National Insurance Affordability Council will manage the national coordination of flood risk management, make recommendations to Government on flood and other natural disaster mitigation projects, and act to reduce natural disaster insurance premiums.

The Council’s immediate priorities are a $7 million contribution to the construction of the Roma levee; $10 million to upgrade flood defences in Ipswich; and $50 million over two years for raising the walls of Sydney’s Warragamba Dam.

Lowering risks through cooperation

As natural disaster risk increases, the costs of recovery also increase, in turn driving up insurance premiums. To alleviate this cost-of-living pressure, a national coordinated approach to natural disaster risk management (NDRM) is needed.

NDRM is most effective when it operates as a set of interconnected processes that collectively help communities understand and respond to disaster risk.

Australia now has all of the key functions of NDRM but does not coordinate these functions nationally. The current investment in disaster prevention has not kept up with Australia’s increasing natural disaster risk profile, with some communities now exposed to unsustainably high levels of risk.

Natural disasters should be viewed as a shared responsibility with government agencies, communities, businesses and individuals pooling their skills and resources to manage and reduce disaster risk.

Consistent regulations, easily accessible natural hazard risk information, improved land-use planning systems, stronger building codes, robust mitigation programs and post-disaster improvements to infrastructure are among the elements that can be changed to significantly reduce disaster risks, avoid higher repair and reconstruction costs, and lower insurance premiums.

The ‘shared responsibility’ approach to NDRM states that all levels of government, industry and the community should be involved, working together to prevent natural hazards from becoming natural disasters.