Underinsurance levels high in bushfire prone areas
In an article published by Insurance & Risk it was reported that over 1.5million blocks of land in Australia are currently situated in ‘bushfire prone areas’ (BPAs)*.
Catastrophic bushfires claim hundreds of properties every year, destroying the homes and belongings of countless families. With extended dry spells already occurring, particularly in NSW, fire authorities are warning of an early and extremely dangerous fire season ahead.
Protect your family and property by preparing early for the upcoming bushfire season. Below we provide tips to help ensure you’re in the best position possible should you be faced with the threat of an approaching bushfire.
Whether you live in a rural or a suburban community, in a stand-alone home, unit or apartment, there is always the inherent risk of a bushfire. A mixture of prolonged heat, dry conditions and strong winds can fast create the ‘perfect storm’ where small sparks transform into roaring infernos, and ember attacks occur kilometres away from the fire front. In a matter of minutes the unpredictable nature of a bushfire can create life threatening situations.
The last severe fire season brought "insured losses of more than $630 million” quotes ICA Chief Executive Rob Whelan. “Australians must not underestimate the damage a severe fire season could inflict.”*
In what has been considered fairly benign fire seasons in recent years, there have still been multiple devastating bushfires across Australia:
As more and more rural areas are redeveloped into sprawling suburban communities, nobody should be blasé about the threat of a bushfire. Kinglake and Marysville are prime examples of this, falling victim to the 2009 Black Saturday fires that tragically burned through over a million acres of land and saw significant loss of life.
Careful preparation is essential to keep you, your family and your property safe when faced with the threat of a bushfire.
If your house or business was damaged beyond repair in a bushfire, could you afford to fully replace it? Every summer carries with it an inherent bushfire risk, therefore having a policy that protects your property assets in a bushfire is crucial.
To help you escape a significant financial loss, it is important to:
a) accurately nominate your building and contents sums insured
b) check your policy wording to determine whether you are covered for bushfire.
If you are uncertain about your current level of insurance cover, talk to your insurance broker to ensure you hold an insurance policy appropriate for your needs.
Throughout the bushfire season, the Bureau of Meteorology (BoM) consults with state fire authorities Australia-wide to publish danger ratings designed to inform residents of potential fire hazards for each day in their local area.
This system consists of two metrics:
Whether you live in or on the outskirts of an ‘at-risk area’, it’s important to make sure you:
In the wake of the 2009 Black Saturday fires, the Australian Government implemented updated rules and regulations for new constructions in BPAs (as part of AS3959). The regulations set out strict new standards and construction material guidelines to help buildings have a better chance of surviving certain bushfire attack levels. What does this mean for you though?
a) Check your level of Insurance!
Unfortunately given the changes, there is now huge potential for buildings in BPAs to be underinsured due to the increased cost of reconstructing a building. For buildings that pre-date the new regulations, the risk of underinsurance is even greater as any rebuild must comply with new regulations.
Did you know that a typical 4 bedroom home in a high-risk bushfire area can cost more than $100,000 extra to rebuild in accordance with the new standards?**
If this is of concern to you, speak to your insurance broker to ensure your insurance accounts for the additional cost of rebuilding in a BPA.
b) Retrofit older properties to minimise the chance of a loss
To minimise the risk of damage, the Victorian Building Authority recommends that owners of older dwellings engage the services of a registered building practitioner to discuss retro-fitting your property. While retro-fitting isn’t mandatory, it can help prevent a total property loss in the event of a bushfire.
If you’re concerned that your property is located in a bushfire prone area, consult with your local state fire or land authority for more information and advice.
Dry vegetation and waste can act as fuel in a fire. A small spark or ember that ignites can fast transform a pile of waste into an additional fire front during a bushfire.
For more tips on how to prepare your property, consult your local fire authority (as per the table below).
You don’t have to live in a rural area to be at risk from a bushfire – ember attacks can occur kilometres ahead of where a fire originates. Whether you are near bushland, a forest, grassland or coastal scrub, you need to have a clear bushfire plan.
A well-practiced written bushfire plan helps you establish clarity on:
Your ability to think clearly during an emergency can quickly become impaired and many lives have been lost due to families and individuals being unprepared and leaving their evacuation until the last minute.
Should I stay or should I go?
As part of your bushfire emergency plan, one of the biggest decisions you need to make well in advance is whether to stay and fight a fire, or to evacuate.
If you don’t think you or your family can successfully defend your property against a fire then you need to relocate somewhere safe as early as possible.
Alternatively, if you decide to stay and defend your property, you need to make sure you are well organised and adequately prepared with the appropriate equipment and resources.
For more information on bushfire plans and defending your property, consult with your local fire authority (refer table below).
Tune into your local ABC AM or designated emergency radio station for further information regarding bushfires and areas under threat. Twitter feeds and other social media account updates are equally as helpful in relaying information during a bushfire.
Keep your eyes out for the mobile number - 0444 444 444. Emergency Alert Australia can send out state-wide or area-specific texts alerting residents to impending fire threats, the appropriate action to take, as well as a telephone number and website where you can obtain more information.
For further information on preparing your property for the bushfire season, please visit your local Fire Authority’s website by clicking the relevant button below:
*Source: ICA warns of grim disaster season
This insight article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 Licence Number: 229092 trading as Whitbread Insurance Brokers for further information or refer to our website.
From July 1, 2017, some residential Strata Insurance policies will experience significant total premium changes as a result of amendments to the Terrorism Insurance Act 2003 (Cth). The changes apply Australia wide, and relate to the introduction of a Terrorism Levy.
As the bushfire season approaches this statistic really underlines how imperative it is to have the right insurance cover and sums insured for your home and contents. The right cover will help to ensure you are in a position to finance the full cost of reinstating your home in the event...
Note: Some information in this article has been generously provided by Whitbread partner, and leading Australian IT specialists, Surety[IT].