How much does extreme weather cost Australian households?

Focusing on the recent natural catastrophes, the report found that in 2021-22, insurers paid $6.41 billion from over 300,000 claims across multiple events, $3.9 billion more than the previous 12 months.

Read more: ICA backs government’s proposed MNE interest limitation rules

Of all the recent extreme weather events, the February-March flood that devastated Queensland and New South Wales (NSW) – also known as Australia’s costliest flood and third-costliest natural disaster – has reached $5.28 billion in insured losses from more than 233,000 claims.

Moreover, of all the areas hit by extreme weather events, Brisbane was the local government area that suffered the greatest loss – at a whopping $1.38 billion, followed by Lismore at $508 million.

ICA CEO Andrew Hall said the recent findings emphasise that Australia is clearly facing the impacts of climate change.

“The new data highlighted in our report and from new research from the McKell Institute are stark reminders of the urgent need to invest in strengthening our communities against worsening extreme weather,” Hall said. “Over the last decade, the percentage of all spending in resilience and mitigation has declined in comparison to the money spent on recovery and clean-up, and this is again a reminder [of] why we need the change in policy thinking.”

On the bright side, Australian governments have been working with various sectors and communities to make the country more resilient to extreme weather. Most recently, the federal government introduced a disaster fund proposal to parliament.