Insurance council warns of impact of border closures on assessing claims as disaster season approaches

It is estimated that more than nine million Australians have been impacted by a natural disaster or extreme weather event over the last 30 years, and Australians are five times more likely to be displaced by a natural disaster than someone living in Europe.

When Tropical Cyclone Seroja made landfall on April 11 this year in WA’s mid-west, wind gusts clocked in at 170kmh — the strongest in the region in more than 50 years.

The damage to towns like Kalbarri and Northampton that bore the brunt of the storm’s force was made worse because the impact was below the 26th parallel, where under the national construction code, buildings are not designed to survive cyclonic wind speeds.

Insurers deployed personnel immediately to the impacted region to begin coordinating the insurance response, and followed up with the deployment of assessors, loss adjusters, builders and trades to the region under the coordination of the Insurance Council.

But Western Australia’s ongoing border closures caused lengthy delays before insurers were able to bring in extra help from eastern States.

An unusually high number of other extreme weather events has put further pressure on local tradies and builders, while a lack of overseas labour and already high demand in the building and renovation market have further lengthened delays.

Natural disasters usually result in a surge of insurance claims beyond the capacity of local workforces to respond. In Australia we have a system of national insurers who quickly mobilise workforce and expertise to locations in need.

Families, businesses and communities rely on insurance disaster responders from interstate or overseas in the aftermath of natural disasters — without them, recovery is delayed with significant personal, social, and economic impacts.

Since the emergence of the Delta strain, State and Territory governments have adopted more risk-averse strategies to border restrictions with no consistency across jurisdictions.

Western Australia’s Government is among those to have taken a particularly hard line.

This means that exemptions to allow insurance disaster responders to enter a State have to be negotiated every time a border is closed, and in some cases are being declined.

The result is uncertainty, delays and setbacks for families and businesses just trying to get their lives back on track.

Insurers are now racing against the seasonal clock. The threat of natural disasters has returned with the warmer weather while Western Australia’s border restrictions remain in place into 2022.

In its seasonal outlook the Bureau of Meteorology has said widespread flooding, coastal flooding and erosion, tropical cyclones, and marine heatwaves are all more likely until April next year.

Natural disasters do not respect State borders or vaccination timelines, and often impact our most vulnerable communities.

The Black Dog Institute has found that post-disaster stressors, including challenges rebuilding, can contribute to mental health problems for those recovering from a natural disaster which can sometimes last years.

We know that every day of delay in processing a claim — particularly following a natural disaster — just compounds the impact of that event.

Modelling undertaken for the Insurance Council found that if an event the size of Cyclone Debbie, which hit Queensland in 2017, occurred now and insurers were delayed by border restrictions by seven days, a total economic shortfall of $687 million would result over the eight weeks following the event.

The modelling estimates a deficit of $195 million in payments from insurers, consequential damage of up to $198 million would occur due to the repair delay, and the cost to business of a one-week delay in the resumption of trading would exceed $294 million.

This outcome could be avoided if insurance disaster-responders are present on the ground from day one.

Insurers appreciate the need for restrictions to mitigate health risks, but these must be balanced against the needs of those requiring critical and urgent repairs to their properties and through the lens of fast-improving vaccination rates in the community.

In this land of drought and flooding rains it is an unfortunate certainty that in coming months communities somewhere across this country will again be impacted by nature’s extreme forces — perhaps in Western Australia.

The Insurance Council has written to national and State leaders calling for a nationally consistent approach to the deployment across State and Territory borders of insurance disaster-responders.

Insurers will make sure disaster responders are fully vaccinated against COVID-19.

The potential impacts of ongoing border restrictions are too grave for us just to cross our fingers and hope we get through this coming natural disaster season without impacts on communities that could have been avoided with a little bit of coordination and goodwill.

Andrew Hall is chief executive of the Insurance Council of Australia