In 2022, Australians claimed more than seven billion dollars on their home insurance – almost double the previous record – after a string of major floods across the east of the country.
In response, home insurance premium rose by at least 14% on average, the biggest rise in a decade.
In the major capital cities, rising insurance costs over recent decades have massively outpaced broader price rises.
In Brisbane, insurance costs have increased by more than five times the Consumer Price Index (CPI), and in Melbourne, the city least impacted by climate change, by nearly three times.
More than one in twenty households now pay more than seven weeks gross income for home insurance.
“Rising insurance premiums are the here and now cost of climate change,” said Stephen Long, Senior Fellow at the Australia Institute.
“Impacts from climate change are non-linear. They are catastrophic in nature and traditional, linear insurance models of calculating and spreading risk are no longer fit for purpose”.
“Even considering only capital city insurance costs, the cost increases are significant, and place enormous pressure on inflation.”
