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Senators investigate climate impact on premiums, coverage 

The Senate has begun an inquiry into climate risk and its impact on insurance premiums, covering issues such as affordability and access to cover.

NSW senator Mehreen Faruqi, deputy leader of the Australian Greens, moved yesterday in the upper house for the establishment of the Select Committee on the Impact of Climate Risk on Insurance Premiums and Availability.

The committee will examine insurance unaffordability in some regions due to climate-driven disasters; unavailability for some people; and the underlying causes and impacts of premium rises.

It is also seeking submissions on the extent to which increased climate risk is being priced into insurance products not exposed to such risk.

The committee is also interested in the distributional impact of premium rises across communities, regions and demographics, and the role of governments in implementing climate adaptation and resilience measures to reduce the cost of insurance.

Labor senator Tony Sheldon says the committee “will further help in identifying areas where the government can assist Australians with rising insurance premiums”.

“Since July 2022, more than half of Australia’s local government areas have experienced natural disasters,” he told today. “Keeping communities safe before, during and after these disasters remains a top priority for the Albanese government.”

The committee will present a final report by November 19.

The Insurance Council of Australia says it will examine the terms of reference. The industry has been closely engaged with the House Economics Committee inquiry into insurers’ responses to 2022 flood claims, which is also examining affordability and the impact of mitigation efforts, a spokesperson says.

“ICA will work with the Senate committee to reduce any duplication of the work of the House Economics Committee.”

Click here for more on the inquiry.