Home insurance premiums have increased 51 percent across Australia in the past five years, with some flood-prone Brisbane residents now quoted up to $70,000 annually, according to ABC analysis showing how climate change is making some homes effectively uninsurable.
Climate change isn't just a future threat in Australia — it's already pricing people out of their homes through insurance. When you're quoted $70,000 a year, that's not insurance. That's a second mortgage to protect against the inevitable.
Data analytics firm Finity compiled the 51 percent increase figure, revealing that homes at risk of natural disasters face the biggest premiums. For residents in flood-prone areas who experienced the 2011 and 2022 Brisbane floods, the insurance market has essentially broken down.
According to documents seen by the ABC, a Brisbane woman affected by both floods was quoted $70,000 a year by Suncorp and $60,000 by AAMI when searching for new insurance last year. At those prices, insurance becomes unaffordable for anyone except the extremely wealthy — effectively rendering the properties uninsurable for most Australians.
Suncorp's response highlights the challenge facing the insurance industry: premiums are being driven by "the increasing frequency and severity of extreme weather events, rising construction costs, and persistent inflation" — all factors that show no signs of reversing.
The insurance crisis creates a brutal dilemma for homeowners in high-risk areas. Without insurance, they cannot get a mortgage — banks require coverage. But with insurance costing more than many people's annual income, homes become unsellable and unmortgageable. Property values collapse, not because homes are damaged, but because they cannot be insured.
This is the climate change impact that doesn't make headlines: not the dramatic floods or bushfires themselves, but the slow financial strangulation of communities as insurance becomes unaffordable. It's happening right now across Australia's flood plains, coastal areas, and bushfire zones.
The federal government has established a Cyclone Reinsurance Pool to address insurance affordability in cyclone-prone regions, effectively subsidizing premiums in Northern Australia. But flood and bushfire risks remain entirely market-priced, leaving homeowners at the mercy of actuarial calculations that increasingly say their properties are too risky to insure at any reasonable price.
The insurance affordability crisis also raises questions about development policy. Why were homes built on flood plains? Why did councils approve subdivisions in high-risk areas? And who bears responsibility when those decisions make properties uninsurable decades later?
Some homeowners are choosing to go without insurance — a risky gamble that leaves them personally liable for any damage. Others are lobbying for government intervention, arguing that climate change is a collective problem requiring collective solutions, not individual financial ruin.
The 51 percent increase represents a national average — meaning many areas have seen far larger increases while low-risk areas have seen smaller rises. That geographic divergence is creating a two-tier housing market: areas where insurance is affordable and properties hold value, and areas where insurance costs make homeownership untenable.
Australia is on the front lines of climate change impacts, and insurance is the canary in the coal mine. When the actuaries say certain areas are too risky to insure affordably, that's a signal about the future habitability of those regions. The question is whether Australia has the political will to respond with managed retreat, adaptation investment, or continued denial until the market forces the issue.
