Blue Mountains City Council

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Insurance

Blue Mountains City Council position

The Council has resolved to take on the issue of adequate insurance cover for residents in bushfire prone areas. The Australian Insurance Council, and its' members, have been trying to deflect their responsibility by suggesting local government inform their policy holders of the adequate insurance required to cover the true costs of rebuilding their homes to the standard set by the NSW Government's Building Code of Australia. At a time when a significant number of our residents face the challenge of rebuilding their homes destroyed by the October 2013 bushfires, this situation remains unacceptable. When we hear that these people, in good faith, insured their homes only to find out at the worst time possible, that the added cost of complying with the NSW Government bushfire building code is up to $200,000 and beyond, we all feel disbelief.

The Building Code of Australia was introduced by the NSW Government in order to better protect the community. The Council supports these building standards for this reason. Insurance companies have known about them after the Victorian fires, the Warrambungles fires and the Tasmanian fires, all of which occurred before last October. They should have told people so that they had the option of adjusting their coverage.

How local government can be held responsible by the insurance industry for NSW Government rules that are Federally regulated, I am not sure, but it certainly looks like a case of side stepping their responsibilities. With huge annual profits, insurance companies must do better for the Australian community and those that matter most - our bushfire survivors.

Mayor, Cr Mark Greenhill

At its Ordinary Meeting 29 April 2014, the Council resolved the following
1.That the Council writes to the Insurance Council of Australia seeking their support to advocate on behalf of underinsured residents;
2. That the Insurance Council of Australia is asked to consider its roles and responsibilities to insurers in relation to underinsurance and that they take a pro-active approach to identifying areas of underinsurance;
3. That the Insurance Council of Australia is requested to facilitate settlement outcomes for fire affected residents who were unknowingly underinsured; and4.That the Insurance Council of Australia be requested to require the strengthening of policies and procedures relating to the insurance industry’s obligations to provide policy holders with accurate estimates of rebuild costs for property in fire prone areas and look at other ways of covering unexpected shortfalls.

For the full report and meeting minutes click here

The Council has also made representation to the Australian Prudential Regulation Authority (APRA) urging them to require the review and strengthening of policies and procedures relating to the insurance industry’s obligations to provide policy holders with accurate estimates of rebuild costs for property in fire prone areas.

We will keep you informed of any response to Council from the Insurance Council of Australia and any further progress on this matter.

Is your insurance cover adequate?
A few quick questions to ask yourself?
1. Do you know your fire rating? (see information below)
2. Are you insured to rebuild not just replace?
3. Have you talked to your insurer lately?
4. When did you last update your contents insurance?

Bushfire Attack Level (BAL) Ratings
Owners of bushfire prone land need to be aware that the relevant bushfire attack level (BAL) applying to their existing or proposed house will impact on the level of construction, and therefore the cost, of building on that land, should it be required in the future.

For further information please click here

 

Am I under insured?

Are you insured for replacement or for rebuild? Do you even know what the difference is? Building regulations may have changed since you bought or built your home. There are some helpful links and information provided by the insurance information website “Get informed” (please note this is a commercial brokers site). Whilst insurance is a very personal choice you may want to look over the information to help you make better informed decisions.

 

Rebuild Calculators

Here is a couple of helpful calculators if you are looking at updating your insurance and need to know an approximate re-build cost. It is just an indicator tool but it may give you somewhere to start.

> Understand Insurance - Building Calculator
> Choosing a Building Sum Insured