Cannington and South Yunderup are two of 15 suburbs nationwide where 50-80 per cent of homes are at high risk of becoming uninsurable due to the risk of flood damage from nearby waterways.
A new report by independent risk analysis company Climate Valuation found more than 5000, or 72 per cent, of properties in Cannington were at high risk of flooding. In South Yunderup the report concluded half of the suburb’s 5000 properties were at risk.
Climate Valuation co-founder Karl Mallon said the report was being released so homeowners weren’t in the dark about the risk of flooding exacerbated by climate change – risk that would leave suburbs without access to affordable insurance and mortgage lending, services critical to a functioning property market.
He said the contagion of insurance withdrawal from at-risk locations around the world had already begun, but with investment in adaptation these zones could still be viable.
“People living in homes at high risk of riverine flooding are there through no fault of their own,” he said.
“Yet they are being left in an untenable position, with few if any options. Insurers alone can’t provide the answer, they have no control over planning, and are also obliged to protect their profitability.
“Local governments have inherited communities in locations that modern technology and climate science now suggest could become unlivable. The challenge therefore is not to find fault, but to find solutions.”
More than 12 per cent of the 17,000 homes in Baldivis, a suburb dotted with cookie cutter housing estates, are also at high risk of flooding.
Modelling indicated widespread flooding would occur over much of the relatively recently developed suburb in a one-in-100-year rainfall, with areas around the water-ski park and aquaculture farm between Telephone Lane and St Albans Road prone to flooding.
City of Rockingham Mayor Deb Hamblin said the state zoned land suitable for urban development, while the local government authority ensured developments were assessed to provide protection to life and property from the type of flooding that would occur in a one-in-100-year rainfall.
“With Baldivis, the Department of Water produced the drainage and water management plan at a district level, which was supported by their district flood modelling and drainage studies which property owners can access online,” she said.
City of Canning Mayor Patrick Hall said his local government did not allow any development within 1 per 100 year floodplain.
He said the Department of Water and Environment Regulation was undertaking a revision of flood mapping for the Canning and Southern rivers including considering projected climate scenarios.
“When this work is completed it will provide a scientific representation of the floodplain and flood risk, which will inform the City’s response to climate change as well as to the changing nature of storm events,” he said.
An RAC spokesman said the insurer had not deemed any properties uninsurable due to flood risk this financial year, but it strongly supported actions to improve the resilience of communities and households and protect them from the increasing impact of severe weather.
“This includes further investment in risk mitigation efforts, and changes to land use planning and building codes, to help reduce the risk of natural disasters,” he said.
“Wherever you live in Australia – whether you’re directly exposed to extreme weather impacts or not – insurance premiums are rising because of the escalating costs of natural disasters, the increasing value of homes and vehicles, high re-insurance costs and high building and vehicle repair costs.”
Skyrocketing insurance premiums could drive the Reserve Bank of Australia toward a cash rate hike in August, warned insurance expert Marty Sadlier, director at MCG Quantity Surveyors.
“This relentless increase in insurance premiums, well beyond increases in other cost categories, is an inflation villain that could see us all suffer from higher interest rates this year,” he said.
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“If government is serious about stemming inflation, then it’s time they step in and address the insurance crisis.”
The Australian Bureau of Statistics’ latest Monthly Consumer Price Index Indicator shows the index rose 4 per cent in the 12 months to May 2024 with insurance premiums rising a staggering 14 per cent during that time – the highest percentage gain across every expenditure class in the analysis.
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