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Cyclone Seroja's southerly path raises insurance challenges

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Cyclone Seroja has caused extensive damage to WA farming properties in addition to towns close to the coast, while the rare path of the storm and its intensity has left a range of rebuilding and insurance challenges, a Sedgwick loss adjuster says.

Seroja tracked unusually south to make landfall on April 11 between Kalbarri and Geraldton, and unexpectedly held its intensity to hit as a category 3 cyclone, bringing the strongest winds to the region in more than 50 years.

The cyclone destroyed buildings not designed for the impact in the holiday town of Kalbarri before weakening to category two strength as it moved across the wheatbelt causing further damage to structures.

Sedgwick Commercial and Domestic Complex WA Area Manager Dale Sweeney says the town of Northampton has also suffered severe damage, while farms, in the middle of trying to sow the next crop, have lost homes, machinery sheds, storage tanks and other infrastructure.

“One property that comes to mind had eight houses on the property and six of the houses have been destroyed,” he told insuranceNEWS.com.au. “I was on one property and there were silos that were half full, that had been picked up off the ground, carried 500 metres and dumped into a patch of trees.”

Mr Sweeney says the damage was comparable to impacts from some of the most powerful cyclones to have hit nothern parts of Australia, where they are frequently experienced.

The Insurance Council of Australia says 4000 claims had been lodged as of yesterday, but it is too early to estimate a dollar value from the catastrophe.

Mr Sweeney says claims are still flowing in and insured losses will be “well and truly” over $100 million, and could double that figure.

Concerns over rebuilding costs and underinsurance have also been highlighted, with properties not constructed to standards now required in the cyclone-prone north and sums insured reflecting the age of buildings.

Mr Sweeney says the remoteness of the area and trades shortages in WA are likely to slow the recovery, while local governments face difficult decisions on higher building standards, given balances between the rarity of the cyclone and repercussions if there is another similar catastrophe.

“They are working based on damage caused by a freak event, and yet if it happens again, there are going to be some serious questions asked,” he said.

Cyclone Seroja affected Indonesia and East Timor before moving into Australian waters and interacting with Cyclone Odette, eventually absorbing the weaker system and changing course.

The US National Weather Service says under the Fujiwhara Effect, when two systems spinning in the same direction pass close enough to each other “they begin an intense dance”, leading to the smaller one orbiting the stronger system and eventually crashing into its vortex.