Australian summer bushfire risk – What’s the official word?

Australian summer bushfire risk – What’s the official word?

With all the rain and floods we’ve experienced recently, you’d be forgiven for thinking that the Australian summer bushfire risk has decreased. Well, it appears that’s not the case as the Australasian Fire and Emergency Service Authorities Council (AFAC) have predicted that the risk of bushfires to be above normal for parts of central western and southern WA, central Australia, Southern Queensland and inland NSW due to increased fuel loads as a result of significant rainfall. Western Tasmania also shows above normal fire potential following a dry Spring period. 

So what areas are in danger of bushfires this summer, why is this risk still high and do you have the right insurance in place to cover your risks? 

Why is the bushfire risk still high?

Due to higher than usual rainfall events across large parts of Australia in the past 12 months, vegetation has increased fuel loads in many regions. The weather bureau is anticipating 2023 to swing back to hot and dry weather, causing the grasslands and vegetation to dry out and become a potential fire hazard. 

Although the Black Summer bushfires of 2019 – 2020 burnt through many areas, this new vegetation will at some stage end up as fuel for bushfires, meaning the fire risk is likely to increase or is currently above normal in some areas. 

Policies, premiums and rebuild costs have changed – it’s time to review your property insurance cover and sums insured with bushfire season already impacting some parts of Australia. That’s because many policy wordings have changed over the past 18 months and premiums have again increased for many types of insurance policies. 

These increases are in part due to the new building codes (following the Black Saturday Fires) that require buildings in high-risk areas to have a bushfire attack level rating. Dependent on this rating, buildings need to be built using specific designs and materials that significantly decrease the risk of bushfire damage. Unfortunately, these changes have also significantly increased rebuild costs. Some insurers have therefore decided to withdraw from offering bushfire cover in some areas, so it’s important to check your insurance cover. 

Of course, these new building codes don’t help the multitude of existing buildings in bushfire-prone areas that weren’t built to survive fires. On top of all these issues is the fact that the cost of rebuilding has significantly increased since the beginning of COVID by as much as 25%, which could result in underinsurance if the sums insured aren’t updated. 

Do you have the right business interruption cover?

Business interruption insurance is another policy that can help you recover quickly from a bushfire, getting you back up and running as quickly as possible. This insurance pays fixed costs of the business such as utilities, employee wages, mortgage, or lease, that need to be paid even though you’re not able to trade. 

So, if your business is in one of the high bushfire risk areas or your need help identifying if your located in a high-risk area, it’s a good idea to chat with one of our insurance specialists. They can make sure that your property insurance is up to date and explain how business interruption insurance can help minimise your financial risks in the event of a disaster. 

To talk to an insurance specialist today find your local adviser. 

Important Information 

This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice. This type of insurance product is designed for small and large businesses, that want to be covered against financial loss relating to accidents or personal injury involving contractors or sub-contractors.

We strongly recommend that you consider the suitability of this information, in respect of your objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.

Business Interruption Insurance

Business Interruption Insurance

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