This report asks policymakers, and society more broadly, to reflect on the values that guide our insurance models in the light of climate-induced extremes like the 2019-20 megafires in Australia.
The report proposes the adoption of an alternative insurance model which will ensure housing security for future generations. It recommends government-led insurance, similar to the Medicare model, as the most ethical approach.
- The frequency and severity of climate extremes— including those that initiate and exacerbate bushfires— is increasing at an alarming rate. Because of this, 1 in 20 Australian homes could be uninsurable by the end of the century.
- Australia can no longer operate its bushfire insurance regime according to a purely market-based distribution of risk model.
- Bushfire insurance should be more like medicare than current home insurance.
- There are intergenerational unfairness implications for market based insurance models.
- The best approach for the Australian bushfire insurance regime is a model based on fairness as social justice.
- Ensuring that a bushfire insurance regime is both just and practicable will require the simultaneous creation of additional supportive policies and potential limitations on insurance coverage.