Bushfire insurance claims for property losses could breach $600 million, with about 1,300 homes razed so far across NSW, Victoria, South Australia, and Queensland since late August, as firefighters continue to battle the fires raging across the states.
More than 4,200 claims worth $297 million have so far been lodged this fire season, and these numbers are expected to climb as assessors moved into the latest fire-affected zones, according to the Insurance Council of Australia (ICA).
ICA noted the true cost of the Australia fires will be much higher, as many of those whose property was ravaged by the fires were either underinsured or have no insurance at all, The Sydney Morning Herald reported.
ICA figures showed that up to 80% of homeowners don’t have adequate insurance. Many householders insure their homes for market prices but failed to buy additional protection to rebuild in fire zones. Up to 10% of homeowners were also estimated to have deliberately understated the cost of replacing their home to lower their insurance premium.
ICA’s Campbell Fuller said many insurers had factored in a dire bushfire season into their claims forecast; but TS Lim, an equity analyst at Bell Potter, warned that insurers could hit their bottom lines once claims reach $500 million, SMH reported.