The catastrophic bushfires that swept through parts of Victoria earlier this month are intensifying concerns that insurance premiums will rise further in regional areas where cover is already unaffordable for many residents.
More than 2,600 insurance claims are currently underway after fires destroyed hundreds of homes and properties, prompting the Insurance Council of Australia (ICA) to declare the event catastrophic. While insurers insist a single disaster does not automatically trigger premium hikes, industry leaders acknowledge that the cumulative impact of repeated climate-related disasters is placing upward pressure on prices nationwide.
For Harcourt resident Roger Wilkinson, insurance has proven critical. His 130-year-old weatherboard home, which he renovated himself, was completely destroyed by the Ravenswood grassfire. Despite the devastation, assessors were quickly sent to his property, and his insurer has indicated the rebuild will be covered.
“We made a real effort to pay the insurance,” Mr Wilkinson said, describing the sacrifices he and his family made to afford the premiums. “It’ll save us, thank goodness.”
Just metres away, the reality is starkly different for David Jeffries, a 69-year-old pensioner whose uninsured home was also destroyed. Without superannuation and unable to absorb rising premiums, Mr Jeffries made the difficult decision to forgo insurance altogether.
“It was a choice I made,” he said. “If I had insurance, I would have had to give up what little luxuries I had left.”
Legal practitioner Zoe Edquist, based in Castlemaine, said the fires have reignited deep anxiety about the long-term affordability and availability of insurance in bushfire-prone areas. Just weeks before the blaze, she helped her elderly parents switch insurers and increase their coverage — a decision that ultimately enabled them to begin rebuilding.
“There is real worry,” Ms Edquist said. “Not just here, but anywhere with a realistic risk of fire or flood. Some properties may simply become uninsurable.”
The ICA’s director of mitigation and extreme weather response, Liam Walter, said insurance premiums do not usually rise after a single event, but acknowledged that claims from catastrophic weather events since September are expected to exceed $2 billion nationally.
“These are significant figures, and insurers do need to account for that in their pricing,” Mr Walter said, while stressing there was no indication of a mass withdrawal of insurance from affected areas.
The ICA has renewed calls for greater investment in mitigation measures, including fuel reduction, backburning and forestry management, to reduce losses and stabilise premiums.
Policy responses remain limited. After the 2019–20 Black Summer bushfires, a Senate inquiry recommended the ACCC investigate insurance pricing and availability in high-risk regions. While the government noted the recommendation in April 2024, no inquiry has yet been commissioned.
Federal Emergency Management Minister Kristy McBain acknowledged the devastation caused by the fires and the growing strain insurance costs place on households, saying the government would continue working with insurers and states to identify mitigation strategies that could ease premium pressures.
For many regional Australians, however, the question remains unresolved: whether insurance will remain accessible at all.
