Catastrophe costs skyrocket

The township of Yarloop is the latest to be affected in a nationwide string of catastrophes, with updated figures from the Insurance Council of Australia (ICA) revealing the combined cost of natural disasters since November 2015 to be more than $515 million.

Insurance losses from the bushfires that moved through south-east Western Australia have passed $57 million from 616 claims, with the tally expected to rise as community and assessors gain access to properties in Yarloop.

Dozens of homes were damaged beyond repair, with powerline damage restricting the towns access to water. Two people were killed as a result of the fires.

A render safe operation has been completed in Yarloop, with assessors now able to access the area subject to local council permit. Assessors are required to provide council with identification and proof of business purpose.

EBM WA State Manager Ryan Cameron says that there has been a great deal of damage done to domestic property, with surrounding farms and infrastructure also affected.

“In the township of Yarloop, which I haven’t visited because there [were] restrictions for getting in, it’s predominantly domestic losses, but there is farming that’s been affected,” Cameron says.

“In Waroona, I did see a lot of damage to power poles, burnt fencing and livestock losses, but it was difficult to get around, as they still have the southwest highway blocked off.  You’ve got to go via back roads.”

Yarloop

Yarloop before the January fires. Source: nearmap

 

Yarloop after the January fires. Source: nearmap

Yarloop after the January fires. Source: nearmap

Cameron says that fears of airborne asbestos kept access to Yarloop at a minimum in the first week following the fires, which caused added stress among the community.

“There is a great deal of frustration, particularly out of Yarloop. There is restricted access going in. A lot of the properties in the town had asbestos in them and there is fear for airborne asbestos issues, and I think they are taking a fairly conservative line,” Cameron says.

“The township itself is not safe because there are still some structures standing. People are pushing their way through without police clearance or shire consent, and they are basically being pushed back. All that’s doing is creating more anger.”

“The town is absolutely decimated,” Cameron adds.

Further to the concerns regarding the safety of older houses in the area, Cameron says that there are concerns regarding the extra cost of rebuilding under updated safety codes.

“We had a conversation yesterday about extra costs for reinstatement for those older properties conforming to new building codes,” Cameron says.

“That is problematic and it is always going to be problematic, with people not understanding what those codes may or may not be and how their insurance may or may not be affected.”

Around Australia, the Great Ocean Road bushfires in December have resulted in insured losses of $86 million from 482 claims, which is also expected to rise.

A Memorandum of Understanding (MoU) has been reached between the ICA and Victorian government that outlines an optional cleanup arrangement for affected property owners.

Insured property owners may elect to pay a maximum of $25,000 for the cleanup cost, which can be deducted from their insurance cover, with any amount exceeding to be paid by the government.

Non-insured property owners will not be required to contribute, with government paying the cost of cleanup.

The Pinery bushfires in November resulted in insured losses of $170 million from 1991 claims and insurers have received 4282 claims following the Sydney tornado, with insured losses passing $202 million.

ICA CEO Rob Whelan says that the Australia-wide damage resulting from natural events acts as an expensive and dangerous reminder.

“These catastrophes highlight the importance of homeowners and businesses making sure they have adequate insurance for their homes and treasured possessions,” Whelan says.

“With building costs rising all the time, it’s vital to make sure property owners review and update their cover regularly to avoid being left underinsured and facing hefty bills.”

“We’ve only just reached the midpoint of summer. Insurers are paying out more than $1.3 million each working day in repairs, building works, settlements and assistance to policyholders just for these four disasters,” he adds.