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Bushfires: Do you have the right insurance and survival plan for summer?

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BOM says El Niño raises the risk of dangerous bushfires this summer yet Finder research shows many of us still have insufficient insurance coverage and no survival plan.

Millions of Australians are worried about a horror summer as many prepare their homes for floods and fires, according to new research by Finder.

Out of a survey of 1,062 people, half of us (48%) are worried about the risk of bushfires or floods this coming summer.

Equivalent to 4.45 million households are nervous about bushfires and floods as Australia edges into summer.

1 in 5 Aussies (21%) are worried about the risk of bushfires. 7% are concerned about floods, while 20% are worried about the occurrence of both.

Hot, dry conditions have already led to unseasonably early bushfires in Queensland, NSW and Victoria with the Climate Council warning the country is "disastrously primed to burn".

Years of rain have caused an explosion in vegetation growth, which is drying out after Australia's warmest winter on record.

In northern Australia, bushfires have already burned more than 610,000km2 since the beginning of the year, an area larger than many countries including Spain, Thailand and Cameroon.

Australians unprepared for the summer ahead

Worryingly, 59% of Australians within a 10km radius don't have a bushfire survival plan, leaving millions unprepared for fire warnings.

Finder's data shows 57% of households have home insurance and just 47% of those Aussies have bushfire and flood protection included in their home insurance.

That's the equivalent of 2.48 million households, leaving approximately 6.8 million without additional cover.

Do you have home insurance?

If you're yet to take out home and contents insurance, now is the time to do so.

When you take out a home insurance policy, you won't be covered for bushfire damage claims in the first 72 hours.

You also won't be covered if you take out a policy after the bushfire has started.

How does home insurance cover bushfires?

Finder researched over 20 home and contents insurance policies. All covered loss or damage as a result of a bushfire. This can include repairing or rebuilding your property and replacing your belongings.

Most policies can also cover:

  • Temporary accommodation if your home is destroyed or is unsafe to live in.
  • Demolition and debris removal if your property is destroyed.
  • Surveying and architecture, including redesign work.
  • Storing your belongings in a safe place.

In our research, we also found that some insurers, including Youi and QBE, can also cover you for temporary accommodation if you are forced to evacuate by a government authority.

With Youi, you only need to pay a $400 excess, instead of the basic excess, which is typically around $750. However, the general insurer will only cover costs for up to 30 days. QBE can pay you for up to 60 days.

Underinsurance

Even if you have home insurance, you're not out of the woods yet.

Around 80% of homes in Australia are underinsured, according to the Insurance Council of Australia.

Underinsurance is when you don't have enough insurance to cover the cost of rebuilding your home and replacing your belongings.

One of the best ways to avoid underinsurance is to calculate the cost of your assets by using a building and contents calculator.

Once you've done this, you should get in touch with your insurer to update how much your home and contents are insured for.

Getting bushfire ready

"Now is not the time to be complacent when it comes to bushfire preparedness, with El Niño already showing signs of a hot and dry summer," Insurance Council of Australia acting CEO Kylie Macfarlane says.

The ICA has provided a number of tips to help Australians prepare. This includes steps such as cleaning your gutters and green waste items, keeping gardens maintained and reviewing your home insurance policy.

You can also get bushfire ready by referring to the relevant rural fire and bushfire service:

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