An alarming gap in insurance coverage has been spotlighted by Queensland underwriting agency, Sure, as it drew attention to underinsurance among cyclone-susceptible areas.
Their comparison of coverage across the state reveals stark contrasts that could have dire consequences for residents.
A notable discrepancy exists in the average sum insured: in cyclone-free regions of Queensland, home buildings are generally insured for approximately $532,000 and contents for just above $80,000. However, when examining cyclone-prone cities like Cairns, Townsville, and Mackay, the figures drop to $513,000 for home building coverage and $72,000 for contents.
Bradley Heath, Managing Director of Sure Insurance, urges residents to be alert to escalating rebuilding costs. He remarks, “We are appealing to Cairns and Far North Queensland householders to check their current home building and contents sum-insured, as it’s critically important to avoid underinsurance and have in place sufficient financial capacity to completely rebuild their home and replace the entire contents should a total loss occur.”
Residents need to consider various expenses that often accompany cyclone damage: beyond debris removal, they must account for planning, engineering, local government fees, and even temporary accommodation costs, points out Sure Insurance.
The Bureau of Meteorology’s October projection adds a layer of urgency by predicting an average number of cyclones for this season, from November 1 to April 30, with the higher potential for severe cyclones due to rising ocean temperatures. This forecast raises an imperative for reassessment of coverage adequacy.
Originally reported by Sure, the necessity for policy reviews aligns with broader climatic concerns. Drawing parallels to other cyclone-vulnerable economies, lacking adequate cover could severely impede recovery efforts after severe weather events. Enhancing policy adherence and educating households about rebuilding costs are proactive steps in mitigating the risk of financial ruin.
Average building insurance in non-cyclone areas: $532,000
Average contents insurance in non-cyclone areas: $80,000
Average building insurance in cyclone-prone areas: $513,000
Average contents insurance in cyclone-prone areas: $72,000
This situation is a call-to-action for homeowners, urging an immediate reassessment of their insurance coverage in response to growing environmental challenges. Such strategic evaluations could prevent considerable setbacks and ensure readiness in the face of natural disasters that are becoming increasingly difficult to predict and manage.
Published:Tuesday, 17th Dec 2024 Source: Paige Estritori
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Knowledgebase
Disability Insurance: A type of insurance protection that pays a portion of a person's income lost due to a total or partial disablement arising from either an accident or a sickness.
