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Report warns that climate change could make 1 in 25 homes uninsurable by 2030.

Report warns that climate change could make 1 in 25 homes uninsurable by 2030.

A map of Australia showing percentage of uninsurable homes.

About one in 25 Australian homes are at high risk of becoming effectively uninsurable by 2030, according to a new Climate Council report based on analysis by a climate risk assessment group.

That number rises to more than one in 10 homes for some of the most affected regions, including parts of Brisbane, the Gold Coast, Greater Shepparton, Ballina and Port Adelaide.

The report’s authors warn that Australia is facing an “insurability crisis” due to climate change, which increases the risk of extreme weather events and leads to higher insurance premiums.

“We’re talking about half a million properties — it’s not insignificant,” said Nicki Hutley, report co-author and economist with the Climate Council.

Most (80%) of the top 10 impacted electorates are due to increasing insurance risks posed by riverine floods. According to the report “Uninsurable Nation”The following was published today:

Insurance premiums will rise in the future due to increased bushfire and flood rates.

Karl Mallon, Climate Valuation, who provided the data to the Climate Council, stated that when a property is “effectively insurable”, it means that the insurance premiums are too high to afford.

Once there is more than a 1 per cent chance in any given year of a property incurring major damage from an extreme weather event, that’s when premiums start to escalate, Dr Mallon said.

“Once you exceed that threshold, typically the costs start to increase; so instead of paying $1,000 a year, you get $3,000 a year and it climbs — we’ve seen premiums of $30,000 a year,” he said.

“Essentially, we stand by the view that once you get above these levels, there will be many people who cannot afford this insurance.”

A map of Australia showing percentage of uninsurable homes.
Climate Council and Climate Valuation have projected that by 2030, there will be a distribution of uninsurable housing by each state.(Supplied: Climate Council)

Queensland is projected to be the hardest-hit state, with up to 193,000 properties (6.5 per cent of the total number) deemed to be at high risk of uninsurability by 2030, followed by New South Wales with more than 148,000 properties.

The findings were based on a business-as-usual, high emissions outlook for climate change. Dr Mallon stated that the basis of premiums for banks and insurance companies varies, but they must factor in business-as usual forecasts.

He stated that the guidance from the governing regulatory authorities in Australia and around world almost all insists on every company having a view about high-emission scenarios.

“Unfortunately, that is where we are tracking, it’s along those pathways.”

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