Parliamentary Inquiry Reveals $5.87 Billion in Damages from 2022 Floods in Queensland and NSW

Parliamentary Inquiry into the 2022 Qld and NSW Floods.

Lawmakers demand answers! An investigation into insurers’ handling of major flood claims.

On August 7, 2023, the House of Rep­re­sen­ta­tives referred an inquiry to the House of Rep­re­sen­ta­tives Stand­ing Com­mit­tee on Eco­nom­ics. This inquiry will focus on insur­ers’ respons­es to the dev­as­tat­ing floods that occurred in South-East Queens­land and north­ern NSW in Feb­ru­ary and March 2022.

In June 2023, the Insur­ance Coun­cil of Aus­tralia (ICA) released its find­ings on the dev­as­tat­ing Feb­ru­ary-March 2022 floods in South-East Queens­land and New South Wales. The floods have result­ed in a stag­ger­ing $5.87 bil­lion in insured dam­ages.

The inquiry will delve into the pre­pared­ness of insur­ers in effec­tive­ly respond­ing to the increas­ing fre­quen­cy of such events. It will also address crit­i­cal issues such as skills, labour short­ages, claims han­dling, and com­mu­ni­ca­tion with pol­i­cy­hold­ers before, dur­ing, and after these cat­a­stroph­ic events.

Con­sid­er­ing the grav­i­ty of the sit­u­a­tion, the Assis­tant Trea­sur­er has per­son­al­ly vis­it­ed the impact­ed com­mu­ni­ties along­side mem­bers of Par­lia­ment. The inquiry was offi­cial­ly announced after wit­ness­ing the dev­as­ta­tion in Cen­tral West NSW last month.

The Albanese Gov­ern­ment has now unveiled the terms of ref­er­ence for the inquiry.

• To ensure accu­rate rep­re­sen­ta­tion and gath­er vital infor­ma­tion, the com­mit­tee will hold pub­lic hear­ings in regions affect­ed by the 2022 floods, allow­ing affect­ed com­mu­ni­ties to share their expe­ri­ences. A final report is sched­uled to be released dur­ing the third quar­ter of 2024.
• The objec­tive of this inquiry is to pro­vide valu­able insights that will guide the Albanese Gov­ern­ment in its efforts to address insur­ance acces­si­bil­i­ty and afford­abil­i­ty. As part of this endeav­our, the gov­ern­ment plans to invest up to $1 bil­lion over the next five years, through the Dis­as­ter Ready Fund, to enhance mea­sures that pro­tect homes and com­mu­ni­ties from extreme weath­er events.
• The gov­ern­ment is com­mit­ted to tak­ing proac­tive steps to mit­i­gate dis­as­ter risks and pro­mote the devel­op­ment of cli­mate-resilient com­mu­ni­ties. Present­ly, a mere 3% of dis­as­ter fund­ing is allo­cat­ed to risk mit­i­ga­tion, with the over­whelm­ing major­i­ty of resources (97%) ded­i­cat­ed to recov­ery. The gov­ern­ment aims to reverse this imbal­ance.
• The terms of ref­er­ence for the inquiry cov­er a wide range of top­ics, includ­ing insur­ers’ response to claims result­ing from var­i­ous flood events in 2022, as well as pol­i­cy­hold­er expe­ri­ences before, dur­ing, and after mak­ing claims. The inquiry will also con­sid­er obsta­cles to claims res­o­lu­tion, insur­er com­mu­ni­ca­tion, acces­si­bil­i­ty and afford­abil­i­ty of rel­e­vant reports, and the impact of land use plan­ning deci­sions on insur­ance avail­abil­i­ty and afford­abil­i­ty.
• Addi­tion­al­ly, the inquiry will draw on pre­vi­ous reports, such as Deloit­te’s exter­nal review of insur­ers’ respons­es to the 2022 floods, and ASIC’s Claims Han­dling review, to inform its find­ings and rec­om­men­da­tions.

ABC News Arti­cle