Climate change is directly impacting insurance premiums in Australia, leading to rising costs due to increased extreme weather events like bushfires and floods. Businesses and homeowners face higher premiums as insurers respond to elevated risks. Taking proactive steps, such as safeguarding property and regularly reviewing insurance coverage, can help Australians manage these costs effectively.
Have you noticed your insurance premiums climbing higher each year?
If you live in Australia, chances are you've seen a noticeable increase in your insurance costs recently. What we've found is that climate change isn’t just making headlines, it’s making a real impact on your wallet.
Insurance companies base premiums on risk. And right now, that risk is getting bigger because extreme weather events, like bushfires and floods, are becoming far more common. This isn't just our view either, the Australian Prudential Regulation Authority (APRA) confirmed the link between climate change and rising insurance costs in their recent climate vulnerability assessment.
Why Exactly Are Premiums Increasing?
Premium increases boil down to how likely insurers think it is they'll have to pay out claims. Floods, storms, and bushfires used to be less frequent, meaning insurers could charge lower premiums. But times have changed. More severe weather means more claims. More claims mean insurers have to increase prices to manage the financial risk.
We've also seen some businesses struggling with premium increases simply because their insurers now see their industries as higher risk. For instance, if you're running a landscaping business or operating in the film and TV industry, your premium might rise due to climate-linked disruptions like bushfires or flooding.
Here’s another article that digs deeper into exactly how and why climate change is pushing up your insurance costs.
Is Strata Management Affected by Climate Change?
One thing we often see overlooked is how climate risk affects strata costs. Managing your own strata might seem like a great way to save money, but if your building is in a flood zone or bushfire-prone area, rising premiums can sneak up on you. It’s something worth factoring in before taking the leap.
For instance, if your property is in a bushfire-prone area, your strata premiums might significantly increase. That's why Helen advises her colleagues to carefully weigh these costs. Self-managing without factoring in these rising costs might lead to unexpected financial pressure.
Can You Do Anything to Keep Your Costs Down?
Absolutely. One of the first things we recommend is preparing your home properly against climate risks. Check out our tips for preparing your property against bushfires. Being proactive doesn't just protect your property, it could also help prevent premium spikes.
But it’s not just bushfires. Insurers look favourably on businesses and homeowners who actively reduce their risks. This could mean flood-proofing your premises, improving drainage, or ensuring adequate vegetation management around your property.
The Hidden Costs of Climate Change
It's not only direct damage from events like storms and fires causing premiums to rise. Indirect costs, like disruptions to your supply chain or temporary closures are becoming significant. These hidden impacts can be covered by public and product liability insurance. We advise businesses to review this regularly, especially if your operations depend heavily on outdoor conditions or specific locations.
In Australia, we've witnessed businesses close temporarily due to floods or heatwaves. Those disruptions cost money, and insurers factor these indirect risks into their pricing.
What Do We Recommend for Australian Businesses?
Our experience with our customers clearly shows one thing...Insurance isn’t something to overlook. If you're managing your strata, running a business, or even just safeguarding your home, taking climate risks seriously can save you significant headaches.
If you're not sure exactly what coverage you need, it's worth chatting with a professional. Reach out to us directly through our contact page and we can help guide you through the maze.
A Final Thought
It's easy to see climate change as a distant problem. But when it starts affecting your financial bottom line, it becomes personal. Being prepared, proactive, and properly insured is the smartest way to protect yourself and your wallet.
Climate change isn't going away anytime soon, but you can take action right now to minimise its impact on your insurance premiums.
Written By Scott McMurtrie
Senior Insurance Broker
Scott is an accomplished Senior Insurance Broker with over 12 years of experience in designing tailored protection plans for small businesses.
Read More »»
Climate change is directly impacting insurance premiums in Australia, leading to rising costs due to increased extreme weather events like bushfires and floods. Businesses and homeowners face higher premiums as insurers respond to elevated risks. Taking proactive steps, such as safeguarding property and regularly reviewing insurance coverage, can help Australians manage these costs effectively.
Have you noticed your insurance premiums climbing higher each year?
If you live in Australia, chances are you've seen a noticeable increase in your insurance costs recently. What we've found is that climate change isn’t just making headlines, it’s making a real impact on your wallet.
Insurance companies base premiums on risk. And right now, that risk is getting bigger because extreme weather events, like bushfires and floods, are becoming far more common. This isn't just our view either, the Australian Prudential Regulation Authority (APRA) confirmed the link between climate change and rising insurance costs in their recent climate vulnerability assessment.
Why Exactly Are Premiums Increasing?
Premium increases boil down to how likely insurers think it is they'll have to pay out claims. Floods, storms, and bushfires used to be less frequent, meaning insurers could charge lower premiums. But times have changed. More severe weather means more claims. More claims mean insurers have to increase prices to manage the financial risk.
We've also seen some businesses struggling with premium increases simply because their insurers now see their industries as higher risk. For instance, if you're running a landscaping business or operating in the film and TV industry, your premium might rise due to climate-linked disruptions like bushfires or flooding.
Here’s another article that digs deeper into exactly how and why climate change is pushing up your insurance costs.
Is Strata Management Affected by Climate Change?
One thing we often see overlooked is how climate risk affects strata costs. Managing your own strata might seem like a great way to save money, but if your building is in a flood zone or bushfire-prone area, rising premiums can sneak up on you. It’s something worth factoring in before taking the leap.
For instance, if your property is in a bushfire-prone area, your strata premiums might significantly increase. That's why Helen advises her colleagues to carefully weigh these costs. Self-managing without factoring in these rising costs might lead to unexpected financial pressure.
Can You Do Anything to Keep Your Costs Down?
Absolutely. One of the first things we recommend is preparing your home properly against climate risks. Check out our tips for preparing your property against bushfires. Being proactive doesn't just protect your property, it could also help prevent premium spikes.
But it’s not just bushfires. Insurers look favourably on businesses and homeowners who actively reduce their risks. This could mean flood-proofing your premises, improving drainage, or ensuring adequate vegetation management around your property.
The Hidden Costs of Climate Change
It's not only direct damage from events like storms and fires causing premiums to rise. Indirect costs, like disruptions to your supply chain or temporary closures are becoming significant. These hidden impacts can be covered by public and product liability insurance. We advise businesses to review this regularly, especially if your operations depend heavily on outdoor conditions or specific locations.
In Australia, we've witnessed businesses close temporarily due to floods or heatwaves. Those disruptions cost money, and insurers factor these indirect risks into their pricing.
What Do We Recommend for Australian Businesses?
Our experience with our customers clearly shows one thing...Insurance isn’t something to overlook. If you're managing your strata, running a business, or even just safeguarding your home, taking climate risks seriously can save you significant headaches.
If you're not sure exactly what coverage you need, it's worth chatting with a professional. Reach out to us directly through our contact page and we can help guide you through the maze.
A Final Thought
It's easy to see climate change as a distant problem. But when it starts affecting your financial bottom line, it becomes personal. Being prepared, proactive, and properly insured is the smartest way to protect yourself and your wallet.
Climate change isn't going away anytime soon, but you can take action right now to minimise its impact on your insurance premiums.
Written By Scott McMurtrie
Senior Insurance Broker
Scott is an accomplished Senior Insurance Broker with over 12 years of experience in designing tailored protection plans for small businesses.
Read More »»
