COVID-19 hits insurers and builders delaying bushfire repairs

In January 2020, Canberrans faced the full force of mother nature’s fickle temper as a 10 minute hailstorm caused $1.4 billion in damage, prompting 34,000 insurance claims.

To expedite insurance claims, the National Insurance Council declared the storm a catastrophe. Despite this, there are still over 17,000 claims unprocessed.

The speed of claims has now been further impacted by COVID-19, most notably state restrictions enforced because of the virus, which is affecting the building and construction industry.

There is a clear lack of resources in the building industry caused initially by the nation’s bushfires.

Master Builders ACT chief executive Michael Hopkins said, “The construction industry has been impacted by a series of events already this year: bushfires, hail storms, and now coronavirus.

“Nobody could have predicted the impact on the industry of coronavirus so soon after the hail storms.

“We would ask consumers to be patient and to continue to work with their insurance company to get those repairs made as quickly as possible.”

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Bushfire victims not forgotten

Former NSW Rural Fire Service Commissioner Shane Fitzsimmons, who was recently appointed as NSW resilience commissioner told ABC’s 7.30, “”We've had the profound effect of the drought, we've then seen the worst-ever bushfire season on record, here in New South Wales. And now breaking that bushfire event, we saw a number of areas getting hit with storms and floods. Across the top of all of that, you've got literally everybody that can't escape this awful COVID-19 pandemic.

“So we've got communities that are being compounded by disasters, emergencies, disruptions for quite a long period of time and there's no doubt that those communities are hurting, whether they've experienced one of those events or many of those events.

“It's really tough.”

Fitzsimmons has vowed to make bushfire affected regions his priority, whilst nearly three-quarters of the $2 billion of allocated Federal Government funds is committed to a variety of measures.

Yet, it may take a couple of years to complete works given the amount of damage and the impact of COVID-19.

Less usual claims are now being made

According to Head of Communication and Media at the Insurance Council of Australia (ICA), while there has been a reduction in some claims, including motor vehicle claims with less cars on the road, there has been an increase in less usual claims.

“One of the most common claims to be lodged for household insurance is a kitchen fire, and with more people cooking from home, that risk may go up,” Fuller told The Islander

“The risk factors don't fall, they just simply change, and we've had to balance fewer cars on the road with other reasons.”

COVID-19 specific claims are also having an impact on workers compensation. 

In NSW, the State Insurance Regulatory Authority said it had been advised of 153 claims or notifications related to Covid-19, including 23 where a worker had tested positive where work could have been the main contributing factor.

Of the remaining Covid-19-related cases in NSW, 17 were linked to mental health, while the remaining 12 were classed as other injuries or diseases.

WorkSafe Victoria has received nine claims, whilst WorkCover Queensland has so far accepted six claims for work-related diagnosis of Covid-19 – five of whom contracted it while on work-related overseas travel, and one while working at a restaurant.

It’s a balancing act for insurers

Fortunately for policy holders, home building and contents policies are not currently affected by the COVID-19 pandemic.

Furthermore, insurance is not listed as a non-essential activity or business, so insurers can continue to provide services and support to their customers.

Services may also improve as lockdowns in several states begin to ease. 

Insurers have been focused on assisting customers, including those experiencing financial hardship during COVID-19, and are providing a range of relief and support measures and packages or case-by-case assistance during the pandemic.

It’s an important move by insurers, even though it impacts their bottom lines: Suncorp has warned its insurance division took a $205 million hit from market volatility in the March quarter. It also flagged higher provisions for bad loans and the underpayment of some of its employees.

That sort of hit is happening across the insurance industry. However, despite the hit the industry is taking, the support given by insurance providers has been substantial.

The best thing policy holders can do at the moment is be patient with their provider. This may be difficult to do if you have made bushfire related insurance claims, but there are options open to you.  

Call your provider and speak to them about whether you are eligible for financial assistance, or whether there is a different policy that suits your needs. Ask your insurance provider if you are covered for everything you need. 

Types of cover you may need to consider or compare include: 

  • Home insurance – covers financial losses associated with damage or loss of a property you own. 
  • Contents insurance – covers financial losses caused by the loss, theft or damage of your possessions. 
  • Combined home and contents 
  • Renter’s or tenant’s insurance – a low-cost contents policy for tenants that provides limited cover for events such as fire and theft. 
  • Landlord’s insurance – covers the risks associated with renting out a property. 
  • Strata insurance – covers financial losses associated with damage or loss to a property that operates under a strata-title. 

Policy holders can also compare insurance policies with those of other insurers through comparison sites such as InfoChoice.

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