Insurance and Underinsurance

Underinsurance is going to be an issue with events in Townsville. Particularly flood and we are going to see how previous regulatory changes since 2011 work out in practice.

The Insurance Council is constantly on about underinsurance however you can only wonder when your insurer comes back with a contents renewal value which implies you have stripped Harvey Norman of flat screen TV’s in the past year.

This study from JCU is worth a look and bookmark reference: Underinsurance in cyclone and flood environments: a case study in Cairns, Queensland

This is a small sample which is acknowledged. Probably the most interesting bit though was this:

Underinsurance

Spot the anomalies? What would be really interesting though would be if they had thrown in a question on Earthquake risk in Cairns.

Whilst earthquake is not widely recognised as a significant threat to Cairns, our research and the known record of seismic activity along the entire east coast of Australia leads us to conclude that strong earthquake poses the third greatest risk to the Cairns community. This risk is largely derived from the geology of the region. Much of Cairns is built on thick sediments. In addition, the sediments that underlie much of the downtown area are classed as ‘soft’. All these sediments are likely to significantly amplify strong ground motions, even from relatively distant earthquakes. Much of the major construction boom in Cairns took place after the publication of the first Australian earthquake loadings standard in 1979. However, this standard was not used widely in Queensland and, unlike its 1993 successor, did not cover domestic buildings. Nonetheless, many Cairns buildings are earthquake-resistant to a degree, having been designed to comply with wind loading standards from around the late 1950s for engineered buildings and 1982 for domestic buildings.

That report is from 1998.

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