I was reading this story online. Will include just a section of it.
Before Lisa Madden bought her home in the New South Wales town of Forbes in 2020, her bank told her they would not issue a mortgage unless her property had flood insurance.
She took out a policy with Budget Direct and bought a $255,000 single-storey fibro cottage on a quarter-acre block on Ferry Street.
"I had full house and contents insurance and flood insurance," she said.
"It was stipulated with the bank it had to be flood insurance as well."
But on May 2, armed with forecasts for another wet year, Budget Direct had second thoughts.
"They sent a letter and said they will no longer renew my insurance because of the flood," she said.
Ms Madden scrambled to find another insurer — but midway through one of the wettest years on record, no-one would cover her for flooding.
In October, the Lachlan River burst its banks and floodwaters spread slowly towards her now-uninsured home.
"It was very scary. I didn't know what to do. There was nothing I could do really."
In November, the water came into her house, causing an estimated $50,000 in damage and rendering the house unlivable.
"Most of my furniture was ruined — the fridge, freezer, washing machine, dishwasher, beds, skirting boards, doors … [I] had to take all the interior doors off. I can't close the front door."
Now, she's stuck with a $150,000 mortgage on an unlivable, unsellable home.
Ms Madden embodies the insurance crisis facing the hundreds of thousands of Australians who live in homes vulnerable to natural disasters such as floods and cyclones.
Increasingly, insurance cover is either unaffordable or refused outright.
Some parts of this are not that clear. She says the company would not insure her 'because of the flood'. What flood? Had there been a flood there before May? I thought the floods in NSW started about June/July.
Or did she mean they would not include flood insurance specifically in the policy?
As I mentioned a while back on here, I have a friend whose daughter's monthly insurance policy went up $1000 more than usual if she anted to include flood insurance. She removed it but she is still insured, just not for flood (being in a hilly area and on the high side, she is unlikely to ever be flooded anyway).
I do have sympathy for this woman in the article but it does make me wonder-if a bank was wary about issuing a loan 2 years ago, didn't that ring any alarm bells for her?
I am not necessarily on the side of insurance companies, I think a lot of them will wriggle out of paying anything if they possibly can, even if a claim is justified, but any insurance company has to assess risk when issuing a policy and in this case, I think all the insurance companies were quite right to refuse to cover her for flood.
I was watching an old episode of Selling Houses Aust a while back and on it, the team renovated a Qld home that had been gutted by flooding. They showed the marks of where a previous flood about 20 years previously had also gutted the home. I guess my question is-should the home even have been allowed to be renovated and resold as obviously it is going to flood again. Maybe not this year or next, but probably within 25 years.
Maybe councils should be held more accountable for where they allow homes to be built?
I live a few km away from Dandenong creek. No problem for me as when it floods, it does so over a wide area of wetlands there. But council has allowed building on a low lying part next to the wetlands. I was shocked earlier this year to see homes going up. The main road there (Heatherton Rd) is notoriouis for flooding in that spot in any heavy rain.
So what is the solution? There are obviously a lot of homes that are uninsurable now and maybe that is as it should be, because they are high risk. Should there be a buy back or a payout to vicitims? Should rebuilding be allowed but should councils make it clearer there will be no insurance cover in certain areas?
