SYDNEY/LONDON - Only a year after losing their homes to floods in parts of Australia’s north eastern coast of Queensland, people are moving into new houses built on or near the same plots.
A tradesman who has bought a new home in Townsville after walking away from his water-damaged dwelling 15 kilometers away, said the insurance premium had risen 350%, a price he was not willing to pay to protect against another flood. Allianz, for example, has become more selective about writing new policies in Townsville, brokers said, while others including Suncorp and QBE stopped covering large apartment units after the Queensland floods.
They fear banks are building up portfolios of long-term loans against construction projects, infrastructure and real estate that are becoming uninsurable. In Italy, insurers refuse to provide flood coverage to Venice, where flooding is a regular occurrence and has been getting worse due to climate change.
“What has changed is the awareness and emergence of potentially more severe climate damage, be it storm, fire or other climate danger,” he added.The potentially dangerous divergence between the approach taken by banks and insurers over housing and climate change has been flagged at the highest levels of finance.