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13. Insurance Profile
13.1. Background
Insurance is one way by which property owners may reduce exposure to risk and adapt to climate
change. Building and contents insurance are the two insurance products most directly related to climate
change adaptation. These provide for several kinds of hazard, including wind, hail, and stormwater
inundation. Some policies also provide for riverine flooding, while most exclude ‘actions of the sea’ such
as storm surge and sea level rise (Productivity Commission 2012).
New innovative insurance products are emerging in the global market place to address climate change
mitigation, including new weather and drought-related policies, cover for renewable energy projects,
insurance for carbon market trades, and products that offer reduced premiums to companies and
individuals that have green homes and vehicles (
). Further discussion with the
insurance industry is required to ascertain the range of products offered in South Australia that would
assist the community to protect itself from hazards associated with climate change.
The Study Area’s insurance profile has been developed using data sourced from the peak insurance
industry body, Insurance Council of Australia. Other potential data sources include data collected directly
by survey, or data held by Revenue SA
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, however these avenues have not been explored in detail.
The available data is limited to the extent that it does not give sufficiently detailed insight to the coverage
of the region’s insurance profile in terms of the specific types of hazards that are covered. Insurance
policy data provided by the Insurance Council of Australia is classified in broad terms that does not
distinguish between hazards. To gather such information, it is recommended that appropriate surveys be
undertaken of households and businesses within the Study Area as well as engaging closely with
Government agencies to obtain a more detailed insight into the insurance profile of assets and how it
relates to hazards across the region. This should form a part of Stage 2 of the WARCCAP project.
13.2. Private Insurance
13.2.1. Domestic Insurance
In building the Study Area’s broad insurance profile, it is necessary to examine the factors that have the
greatest influence on whether property owners and residents take out insurance or not. For the purposes
of this project, only building insurance has been examined in depth due to the availability of reliable
dwelling and insurance data as well as the relative significance of real property regarding hazards
associated with climate change. It is recommended that Stage 2 of the WARCCAP project explore
measures to obtain details of contents insurance across the region.
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In South Australia, Stamp duties are paid on insurance premiums in the order of $11 for every $100 of premium that is subject to
duty.
