Insurance dispute helplines are struggling to keep up with climate change

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July 08 2021
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More and more Australians are facing extreme weather events, but the infrastructure designed to handle the aftermath isn’t keeping up with demand.

The Financial Rights Legal Centre is calling for the government to step in, as the disaster insurance sector struggles to keep up with a rise in activity.

According to a new report into the aftermath of extreme weather events like the Black Summer bushfires and Cyclone Seroja, urgent funding is needed to ensure affected Australians are able to get legal assistance when they need it most.

Financial Rights Legal Centre CEO Karen Cox said the rise in extreme weather events seen in recent years has also led to a rise in disputes between insurers and their customers.

“When catastrophe strikes, people need help on a number of fronts, including dealing with their insurer. In this fraught and traumatic environment, disputes are inevitable,” she said.

Unfortunately, at the same time as demand is rising for the Financial Rights Legal Centre’s Insurance Law Service helpline, Ms Cox said the organisation has had to cut hours to due to a lack of funding.

“An inability to access free, specialised legal advice to help resolve insurance problems could put the welfare and livelihoods of thousands of people around Australia at risk and end up costing communities and the government a lot more in the long run,” she said.

The report lays out several approaches to addressing these underlying issues, ranging from targeted subsidies that allow residents in high-risk areas to afford the insurance premiums that mitigate their level of climate risk to recommending that ASIC take a more proactive posture with its oversight powers.

Ms Cox also called on insurers to be better at assisting people and base cash settlement offers on the likely cost to the customer rather than the insurer.

“With extreme weather events increasing in both frequency and intensity due to climate change, national leadership is required to address these pressing issues.”

“Many people are being left behind by rising insurance premiums in the face of increasing climate-related risk,” she said.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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