Flood Insurance on homes not to be compulsory

Flood - no sign of a solution

The Federal Government have moved away from their earlier plans and indeed scraped the concept of all insured’s seeking to take out insurance on their home and contents having to take out flood insurance.

The most likely reason for this is the fact that in the initial plan, the Federal government would provide subsidies to those homeowners that were in high flood risk and therefore high insurance premium areas. With the government looking at every possible way to cut costs, regardless of the benefit to the economy or society, the decision came as no surprise to me.

I in fact did not support the plan although I am of the firm view that the issue of flood insurance needs addressed but as part of a larger strategy to mitigate the risk of flood in the first place. Insurance should never be relied on as the first line of defence; it should always be the very last line of defence/risk management. As the goal keeper it is vitally important but the goalie cannot take the place of the whole team!

One of the risks associated with the initial plan which the government has raised is that compulsory flood coverage might force some insurers to withdraw from some high-risk areas. We have certainly seen this with the cyclone prone areas of Australia and in farm insurance in states with high fire service levies.

So now where? Flood is still a problem. The government will not assist with subsidies to assist those that really need it to have the cover so where does this leave the policy holders, communities like Ipswich, Laidley, and countless others in Queensland and New South Wales.

Real leadership is required by the Federal Government to address this national problem which continues to affect our economy and the livelihoods and very homes of those that government are elected to protect!

Australia has always been a country of drought and floods. We are currently in a crippling drought of real leadership when it comes to addressing many national issues including the risk management of flood and at the same time we have a flood of concern within government about poor opinion poles, obtaining a surplus at any cost, and retaining power at any price. Not a receipe that gives me any hope for a speedy resolution to this national disgrace.