Not caught up in Australia's floods? This is why you're still paying the bill

All Australian households – whether directly impacted by recent floods or not – are having to pay an average of $1,532 a year to repair the damage inflicted by extreme weather disasters, according to a new report.

Eight-year-old Myla (pictured) and her mother Ella Buckland lost their house and all its possessions in the floods that ravaged Lismore in northern NSW, earlier this year. Credit: Supplied

Key Points

• All Australian households are having to pay an average of $1,532 a year to repair the damage.
• The Bureau of Meteorology (BOM) has warned regions in Queensland and NSW to brace for more severe storms this summer.

Ella Buckland is petrified of what the future holds.

The 41-year-old resident of Lismore, NSW, has survived one of the worst flooding disasters to have engulfed Australia.

“It’s been a really full-on year,” Ms Buckland, who lost her house and all its possessions to the floods in February, told SBS News.

“My daughter’s school got flooded as well,” the mother of eight-year-old Myla said.

“At that time, it was like there was nothing left in Lismore – nothing recognisable … but it’s slowly coming back.”

After six months of extensive repairs, Ms Buckland has moved back into her house but the disruptions caused by the natural disaster earlier this year are far from over.

The annual premium Ms Buckland pays to her home insurance company has more than doubled - from $2,200 last year to almost $5,000 this year.

And that’s not all.

A rise in the cost of living along with increasing school fees and interest rates are all taking a toll on Ms Buckland.

“Next year is going to be difficult,” she said.

‘Every Australian pays for natural disasters’

Ms Buckland is not alone.

According to a new report from think tank McKell Institute, commissioned by the Insurance Council of Australia (ICA), extreme weather events over the past 12 months have cost every Australian household an average of $1,532.

Michael Buckland [no relation] is the CEO of The McKell Institute.

He says Australians are paying the cost of natural disasters, even those who were not directly affected by them.

“The 2022 floods along Australia’s east coast not only impacted millions of people and cost more than $5 billion in insurance damages, but they also showed that even individuals who were not directly impacted by the event bear the economic and social cost,” Mr Buckland said.

“Every Australian pays for natural disasters through the rising cost of produce or shouldering the tax bill for recovery,” he said.

Flooding on Molesworth Street, Lismore, NSW, in March 2022. Source: AAP / Jason O'Brien

And it’s about to get worse.

The Cost of Extreme Weather report says Australian households, which are used to paying an average of $888 per year to fix damages inflicted by extreme weather, will be paying up to $2,500 annually by 2050.

“The direct costs from extreme weather events are estimated to grow by more than 5 per cent above inflation and reach more than $35 billion by 2050,” Mr Buckland said.

“In just under three decades Australian households will be paying more every year for the direct costs of extreme weather events and the wider economic costs will be even greater.”

How can the problem be fixed?

Andrew Hall is the CEO of ICA.

He says the new report is a stark reminder of “the urgent need to invest in strengthening our communities against worsening extreme weather”.

“Over the last decade the percentage of all spending in resilience and mitigation has declined in comparison to the money spent on recovery and clean-up, and this is again a reminder why we need the change in policy thinking,” he said.

His comment came just a day after the Albanese government introduced legislation to invest $200 million a year in resilience measures through its Disaster Ready Fund.

The $200 million investment was a key Labor promise in the lead-up to the federal election this year.

Flooding in Lismore, NSW, in March 2022. Source: AAP / Jason O'Brien

While Mr Hall welcomed the move by the federal government, he said state and territory governments should follow suit, too.

“States and territories must also do their bit and match this funding to protect communities from worsening extreme weather,” he said.

“They should also act now to reform state taxes on insurance products as an immediate measure to make insurance more affordable and lift the level of cover against extreme weather events.”

The worst is yet to come

The Bureau of Meteorology (BOM) has warned regions in southern Queensland and northern NSW to brace for more severe storms this summer.

“We’re likely to see events where there’ll be damaging hail, intense rainfall, flash flooding, but the broader picture is again for above average rainfall and riverine flooding,” BOM senior climatologist, Greg Browning, said at a press conference in Canberra on 31 August.

Mr Browning said the soil in these regions has a high moisture content, which means it’ll not readily absorb the rainfall, worsening the effect of the downpours.

I am concerned about flooding again. The latest weather reports are predicting a third year of La Niña … I’m really worried about that.

Ella Buckland – Lismore, NSW, resident

The news fills Lismore-resident Ms Buckland with fear and concern.

“I am concerned about flooding again. The latest weather reports are predicting a third year of La Niña … I’m really worried about that.”

According to the report, adults in Lismore suffered an average loss of $20,000 per person compared to $1,500 in Brisbane.

Claims from Lismore averaged almost $80,000, Ballina $64,000, Byron and Richmond Valley both around $50,000, and Brisbane around $30,000, the report said.

In 2021-22, insurers paid $6.41 billion from more than 380,000 claims across multiple events, which was $3.9 billion more than the previous 12 months, according to the report.