National flood insurance

Australia’s floods highlight major market failure by the insurance industry – and chronic lack of action by government to tackle this problem.

flood_insurance_stdLa Trobe University legal researcher Rachel Anne Carter says increasingly frequent and severe natural disasters, particularly flooding in Queensland, cost Australia billions of dollars each year.

‘Yet our insurance system is grossly inadequate to deal with such devastation. Many people in areas traditionally prone to flooding are precluded from having access to insurance,’ she says.

‘Legal regulation dealing with insurance allows private insurers to be selective about risk and to decline insurance, particularly where flooding may occur.

‘Or the cost of this insurance is so high that only the very rich have access to something that should be available to all, thus the most vulnerable are left to suffer.’

Ms Carter says the government has the power to alter this situation, and to alleviate the financial burden of flood damage on individuals.

‘Yet it has shied away from providing such insurance, although there is clear evidence of the market failure amongst private insurance companies to offer such insurance.’

Flood victims, she says, are amongst the most vulnerable people in society.

‘Not only do they face the heartache of losing everything – but in the absence of access to insurance they are forced to rely on government handouts and public benevolence.’

Ms Carter says it is time for action: ‘How many more floods need to occur? How many more lives have to be devastated before government wakes up and realises that flood insurance should be a national priority?’

You can also find Ms Carter's Opinion Piece:,-flood-and-storms-and-insurance

Ms Carter can be contacted on Tel: 03 9479 3684; or Email: