A series of hurdles have constrained insurers as they battle half a million claims from a series of some of the worst catastrophes ever experienced in Australia.
Insurance Council of Australia (ICA) tells insuranceNEWS.com.au, the industry has been hit by 379,368 claims resulting in losses of $5.84 billion from the combined total of three declared catastrophes last year (listed as numbers 213, 214 and 216 on its website), the record flood this year and the Victoria’s Mansfield earthquake.
Adding to that number are another 105,000 recent claims with $1.7 billion in losses incurred from three other ICA-declared catastrophes: the 2020 “Halloween” hailstorm (number 204), the Perth Hills wildfire (number 211), and the floods. catastrophic in March 2021 (number 212).
The nearly half a million claims for those natural disasters since November 2020 could not have come at a worse time for those affected.
Aid has been disrupted by covid in many ways, initially by border closures in Victoria and WA, and later by supply shortages that are impacting around the world due to disrupted supply chains. A shortage of skilled labor has further hampered efforts to secure experts to assess the damage, or find workers available and well enough to undertake repairs and rebuilding.
The hard-to-reach locations of some of the events, such as remote WA after Cyclone Seroja and the Dandenong Ranges in Victoria, where access was prohibited in some areas for security reasons, have also slowed claims progress. And some residents were wary of visits anyway due to social distancing.
Local media in Melbourne highlighted the issue today with a special focus on the anniversary of Catastrophe 214. That severe storm with extremely high winds hit cities including the Kalorama, Gippsland and Yarra Ranges, causing significant felling of large trees and property damage. .
ICA Executive Director Andrew Hall was interviewed by local ABC radio morning announcer Virginia Trioli and told that the latest figures available show that the losses suffered by the ICA declared “Victorian Severe Storms & Flooding” amount to $302.97 million from 34,016 claims, with a closed rate of 88%.
Insurers were criticized for delays a year after the event, 3AW’s Neil Mitchell describing a “horrible waiting game”, with Cockatoo resident Ben Owen telling the radio show that his home was destroyed by a falling tree and that the work to rebuild his house had not yet begun. and insurance company delays had slowed progress.
“They sat for three months and said ‘No, we’re going to pay you,’ so we’ve wasted three months there,” he said.
However, another affected resident told Ms Trioli that her insurer, RACV, had been commendable and promptly awarded her a payment.
“Over the last couple of years, closing rates have been a bit slower than we’d normally like to achieve and this is due in large part to real trade-related and labor-related issues to get things done,” Hall said.
“It has been aggravated by covid, there are no two ways to do it. Short term accommodation is very hard to come by, materials, trades and labor have been very difficult.
“I know it seems like we’re making excuses, I know things can be very difficult for people and we try to make sure that’s not the case.
“As everyone knows, finding a builder these days and getting materials and things like that can be quite a challenge and we’ve seen it at a number of events.”
When asked if insurers had a “cultural problem,” Hall responded that more than $300 million had been paid out and 88% of claims were closed on time.
“Literally thousands of claims were paid and people were returned to their homes, temporary housing was covered and rental cars were provided. Policies do respond.
“When there has been an event like this there will be a group of cases that are very difficult to determine due to the nature of the assets, where and how they are built, the policy and the coverage.
“I think in the vast majority of insurance cases in this country … we’ve largely responded the way we need to respond and we’ve taken care of the community.”
Hall said that after the 2019/20 bushfires there was a very high cash settlement rate, while “now it’s more of a mix with the storms and the flooding.”
Ms Trioli said it was “a very difficult time to be an insurance company due to climate change and extreme weather that is hitting us fast”.
Mr. Hall added: “It is certainly capping off what has been several years of very big events now in this country with extreme weather. We are now in a period in this country where I cannot see this slowing down.
“We need to make sure people are living in homes of the correct standard.”
Following the storm, the ICA activated the field deployment of disaster specialists to Traralgon, Latrobe, Yarra Ranges and Hepburn to support recovery centers and worked with Emergency Management Victoria and Bushfire Recovery Victoria to coordinate the recovery effort from disasters.
The ICA says that 11.8% of Catastrophe 214 claims still open are in a combination of stages.
They may have all done apart from the final paperwork, or have unfinished work in progress, or are waiting for car parts or building materials, held up by a lack of suitable trades or experts, or held up by dispute resolution processes.
The Insurance Code of General Practice states that insurers will respond to catastrophes in an efficient, professional, practical and compassionate manner. When an extraordinary catastrophe claim arises, an insurer will make a decision in writing within 12 months of receiving a claim, or explain internal complaint processes, the Code says.
Here are details and claims closing rates for the following catastrophes, plus 214, that have recently plagued insurers and the communities they cover:
Catastrophe 221, floods in South East Queensland and New South Wales. Claims closed 21%
From February 22 to March 9, sustained heavy rains caused flooding from Maryborough in Queensland to Grafton in NSW. Many areas received more than half of their average annual rainfall in just one week, and several rivers set new record highs.
The ICA says claims incurred $4.3 billion from 216,465 claims, with claims valued at almost $1 billion closed.
Catastrophe 216: severe storms (SA, Victoria and Tasmania). Claims closed 64%
In late October and early November last year, a large amount of hail, rain and strong winds hit SA, Victoria and Tasmania. Claims incurred $762.89 million from 103,103 claims.
Catastrophe 213: Cyclone Seroja. Claims closed 81%.
On April 14 last year, Tropical Cyclone Seroja made landfall, and the coastal town of Kalbarri took the brunt, as did the community of Northampton, severely damaging homes, businesses, communications and road infrastructure, as well as public service. of electricity, in several of the communities of Western Australia. Claims incurred $357.94 million from 9,397 claims.
Catastrophe 212: Extreme weather event (NSW, Queensland, Victoria). Claims closed 87%
In March last year, much of New South Wales experienced devastating storms and flooding for several days, with South East Queensland also affected. Claims incurred $618 million from 59,000 claims.
Catastrophe 211: Perth Hills Bushfires: Claims closed 87%
In February 2021, communities in the North East Perth Hills region were affected by bushfires. Claims incurred $99 million from 1,300 claims.
Catastrophe 204: Halloween hail storm. Claims closed 93%
Hail as large as grapefruits hit South East Queensland on October 31, 2020. Claims incurred $1.05 billion from 45,000 claims.