Unaffordable house insurance premiums are adding to cost of living woes and it's one of the many reasons we must electrify our homes.
Electrifying our homes will not only make our homes more efficient and cost us less to run, but it will make the transition to a fully renewable grid and away from fossil fuels quicker. It is the burning of fossil fuels that is behind climate change and the devastating weather events that are becoming more and more frequent. Destroying homes, livelihoods and communities and forcing insurance policies up.
Severe weather events are already costing the Australian economy over $38 billion a year.Which is predicted to rise to at least $73 billion per year by 2060, if climate change continues unmitigated.
In Australia we are facing increasingly frequent extreme weather from bushfires to floods to cyclones. Damaging our homes, infrastructure and communities. Impact from extreme weather is driving insurance costs through the roof, and that is fast outpacing inflation, and then in turn fuelling the cost-of-living crisis.
Insurance premiums are determined by risk, so as severe weather events become more frequent, insurance costs will continue to increase.
For many households, insurance is already beyond affordable. And it is predicted that by 2030, one in 25 properties won't be able to get insurance. That's 588,857 homes out of 14,739,901. In the most affected regions, more than one in 10 homes would be uninsurable. And it won't even be a matter of affordability, the insurance companies will refuse to insure properties in areas where risk of fire and flood are very high.
The risk of homes being underinsured or becoming uninsurable will not only have significant financial impacts for households, but also for the economy.
Climate change is not only forcing up insurance premiums, but it is triggering a push from the insurance industry for "community relocations". Planned relocation is not a new phenomenon, with governments worldwide relocating communities to protect them from climate-related disasters and environmental change.
Last year, Australia and New Zealand's largest general insurer, IAG, commissioned a report into the factors involved in planned relocation. The report highlights that it's not only homes that will need to be relocated but hospitals, essential services and roads are also at risk. For example, in the wake of the devastating 2022 floods in Northern New South Wales, the state government identified "planned relocation" in a State Disaster Mitigation Plan.
Planned relocation will be something all governments of "at risk" areas will need to plan for but hopefully it will be a last resort alternative. Can you imagine how unsettling it would be for families, communities and businesses to be uprooted and moved, undermining everything they have built.
This is why governments, businesses and individuals must do all they can now to mitigate these disasters. Electrifying our homes is one important step we can all take with the help of government incentives and rebates.
Bushfire Survivors for Climate Action have put together a "tongue in cheek" but shockingly confronting video to illustrate how real these threats of homes becoming uninsurable are and skyrocketing insurance policies.
Rising insurance premiums is one of the many reasons 1 Million Women is calling on the State and Federal governments to support 1 million households to electrify within the next three years. You can take action by adding your name to our policy asknow.
Header image from Unsplash.
