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ICA hits back at ‘scaremongering’ climate risk analysis

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A climate research group’s suggestion that many homes may become too risky to insure because of climate change has been criticised by the Insurance Council of Australia as “scaremongering”.

Analysis by Climate Risk’s Director of Science and Systems Karl Mallon indicates at least 850,000 homes, or nearly 10% of dwellings, could fall into an “uninsurable” category by 2100, an increase from about 220,000 in current studies.

But ICA has rejected the theory, although it acknowledges homeowners in high-risk areas may have to pay more.

“ICA does not believe any part of Australia will become uninsurable, though risk rating may mean high premiums for many property owners,” spokesman Campbell Fuller told insuranceNEWS.com.au.

“Australia’s general insurance industry is adept at managing the prudential risks that flow from natural disasters, as well as its response to policyholders.

“It doesn’t feel that scaremongering serves the best interests of the community.

“However, it believes governments should play a more active role in informing each property owner about the specific risks they face.”

Dr Mallon says homes in areas prone to floods, cyclones, bushfires and other hazards are looking increasingly risky to insure as climate change takes hold.

“The problem will be the impacts are very concentrated in certain communities and so the situation economically, financially will be disastrous for those people,” Dr Mallon told insuranceNEWS.com.au.

ICA says one of the best ways to address climate change-fuelled weather extremes is through early action.

“The predicted long-term impacts of climate change are a clear reminder to all levels of government that communities should be protected from the impact of known as well as anticipated extreme weather,” Mr Fuller said.

“This should be in the form of nation-building investments in permanent mitigation, incentives to improve the resilience of buildings in at-risk regions, better land use planning, and stronger building codes.”