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Timber shortage to hamper Victoria flood recovery

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Recovery efforts in Victoria after high winds and torrential rain hit Gippsland, the Yarra Ranges and the Dandenongs last week are being hindered by both access problems for adjusters and a likely shortage of building materials.

Gallagher Bassett Global Executive VP Jon Winsbury, who has more than 30 years’ experience in the industry, says those affected may struggle to access building supplies for mitigation and repairs.

"The availability of make-good materials at the moment throughout the Australian market is diabolical due to COVID,” Mr Winsbury tells “Basically, timber has run out.”

Gyprock, chipboard, cables and other basic building need are all more difficult to obtain, particularly away from major city ports.

“There’s a nationwide shortage of anything being imported because of COVID – ships waiting a long time to dock – and that’s going to have a knock-on effect both from a mitigation perspective, boarding up a window for example, and the repair itself.”

This can lead insureds and brokers to be “frustrated” with their carrier, Mr Winsbury says.

“Insureds could face lengthy delays and it is pretty difficult to do anything about it other than to be prepared. That’s the situation facing catastrophe events at the moment Australia wide and it’s felt more keenly in regional areas,” he said. “It may not be the insurance company. They may simply not be able to secure the items necessary to commence repairs.”

The Insurance Council of Australia (ICA) says about 16,000 claims have been lodged following the Victorian storms, with losses estimated at $144 million as of the end of last week.

Several areas have been inaccessible to assessors, and the ICA says insurers expect claims to rise once roads are cleared and deemed safe. This can increase the damage bill, Gallagher Bassett says, for example if it continues to rain and property owners cannot make use of a tarpaulin.

“That’s a relatively recent dynamic in insurance catastrophes that we are seeing right across the eastern seaboard that didn’t exist ten years ago and it’s all to do with the occupational health and safety of the adjusters and the police taking that view,” Mr Winsbury says. “This is leading to a knock-on effect of greater damage because of simple things like not being able to dry your house out because you can’t get back to it.”

Thousands of customers were without power for an extended period which may increase business interruption and spoiled food claims.

Traralgon was seriously affected by flooding after the town’s creek spilled its banks and Mr Winsbury says it is important to evaluate just what each policy insures.

“It is the question of how did the water get into the home? If they are on the side of the hill and it ran down the hill into the house, they have a lot more chance of being covered under a standard storm and tempest clause than if it is water rising from local creeks and they don’t have flood coverage,” he said.