The Royal Automobile Association of South Australia (RAA) has advocated for increased government investment in disaster mitigation and resilient housing so that home insurance remains sustainable.
A recent survey by the RAA revealed that nearly 80% of the participating South Australians are concerned about the growing frequency of natural disasters and their potential impact on homes, while 63% support additional funding for disaster mitigation efforts to address risks from bushfires and floods.
RAA chief executive officer Nick Reade said that climate-related disasters are increasing the financial burden on homeowners – an issue that aligns with findings from the Actuaries Institute’s latest report on home insurance affordability.
The Home Insurance Affordability and Home Loans at Risk Report by the Actuaries Institute published in August 2024 had revealed that steeper home insurance premiums have caused the number of Australian households experiencing home insurance affordability stress to rise by 30% to 1.6m in the past year.
The report had found that these households spend an average of 9.6 weeks of their gross income on home insurance, which is seven times more than the average household. Mr Reade said the risk to properties is rising and putting pressure on insurance affordability not only in Australia but globally.
RAA has said policy changes to improve disaster resilience concerns are important. To address these concerns, RAA has advocated several policy changes to improve disaster resilience and help stabilise insurance costs. The main recommendations include:
- Expanding the federal government’s AUD200m Disaster Ready Fund into a long-term, indexed program
- Allocating revenue from the 11% tax on general insurance products toward disaster mitigation initiatives
- Strengthening land-use planning regulations to prevent home construction in high-risk areas
- Updating the National Construction Code to include resilience measures, with state-level adoption in South Australia
- Addressing the balance between recovery and prevention