Alfred’s Aftermath: Insurance Claims Surge in Cyclone-Hit Zones

Alfred’s Aftermath: Insurance Claims Surge in Cyclone-Hit Zones

Southeast Queensland is grappling with the extensive damage inflicted by Tropical Cyclone Alfred, with insurance claims rapidly escalating as residents commence the arduous clean-up process. This article analyses the immediate aftermath, providing crucial guidance for property owners, builders, community organisations, and policymakers navigating the complexities of recovery and reconstruction. It also addresses the widespread social impacts and the importance of fostering community resilience. We’ve summarised key aspects of the situation to aid in understanding the challenges and opportunities ahead.

Immediate Actions Following the Cyclone

The Insurance Council of Australia (ICA) emphasises that safety is paramount in the wake of TC Alfred. Residents are urged to exercise extreme caution around potential hazards:

• Be mindful of electrical hazards and fallen powerlines. Never approach or attempt to move fallen wires, even if they appear inactive and always prioritise safety.
• If water has entered the property, *don’t turn on your electricity until it has been inspected by a qualified electrician*.
• Contact your insurance company *as soon as possible* to lodge a claim and seek guidance on the claims process. It’s crucial to organise your claim process efficiently.
• Property owners who have sustained roof damage should advise their insurer immediately.
• Do not drive your vehicle if it has suffered water damage; have it professionally assessed.

Navigating the Clean-Up Process

Before commencing any clean-up activities, ensure your safety and document all damage meticulously. The ICA advises the following:

• If you’ve been given the go-ahead to return to your property, you can clean up if it’s safe to do so, but check out these tips first.
• Before you start your cleanup, document the damage with photos and videos to support an insurance claim. This will help to visualise the extent of the damage for assessors.
• Take photos before removing any water damaged or soaked items that may pose a health risk; *this is vital for your insurance claim*.
• Make a list of damaged items, including the brand, model, and serial number if you can. This detailed information will expedite you case worker process.
• Don’t throw away items that could be repaired unless they pose a health risk. Many items that appear beyond repair may be salvageable through professional cleaning and restoration.
• Speak to your insurer before you attempt or authorise any building work, including emergency repairs, and ask for the insurer’s permission in writing, as unauthorised work may not be covered by your policy. It’s important to prioritise communication to minimise complications later on.

Assessing the Damage and Financial Impact

It’s currently premature to determine the total damage bill resulting from TC Alfred. However, examining previous events provides some context:

• Tropical Cyclone Jasper (2023) incurred costs of $409 million from around 10,500 claims.
• Cyclone Tracy (1974), normalised to 2023 values, would have incurred $7.4 billion in claims, making it the costliest cyclone in Australian history.
• The early 2022 floods remain the costliest insured event in Australia’s history, with $6.4 billion in insured losses across more than 245,000 claims. We can analyse this history for patterns of failure.

These figures highlight the significant financial burden natural disasters place on communities and the insurance industry. The economic impact will ripple through affected regions as infrastructure is repaired and life begins to normalise.

Understanding Insurance Coverage

Most standard home and contents policies in Australia typically cover cyclone damage. However, it’s critical to verify your specific coverage with your insurer or by reviewing your product disclosure statement. Note that some policies may exclude flood cover.

The ICA has consistently emphasised the importance of understanding your policy’s inclusions and exclusions. Policyholders should contact their insurer to clarify the scope of their coverage to prevent unforeseen financial burdens.

Flood Risk in Australia

Flooding presents a substantial risk throughout Australia. Key figures include:

• Approximately 1.36 million properties face some risk of flooding.
• An estimated half of these properties do not meet modern flood resilience standards.
• Around 298,000 properties – roughly 225,000 homes and 73,000 businesses – face at least a two to five per cent chance of flooding annually.
• 91,000 of these high-risk properties are located in Queensland.

Notably, a correlation exists between high flood exposure and low socioeconomic status. The 2024 National Flood Information Database (NFID) indicates that approximately 70% of households exposed to the highest flood risk reside in areas where the median income is below the national median ($92,000), and around 35% are in areas where the median income is below the poverty line ($58,000).

Furthermore, only around 23% of the estimated 225,000 homes in the highest flood risk locations across the country have flood cover, compared to an estimated 60% nationwide. Mitigation strategies must prioritise flood-prone regions in order to stabilise insurance availability.

The Call for a Flood Defence Fund

In February 2025, the ICA released its Federal Election Platform, advocating for a Flood Defence Fund amounting to $30.15 billion over ten years. The funding should be shared by the Federal Government and the state governments of Queensland, New South Wales, and Victoria, which would:

• Deliver new critical flood defence infrastructure ($15 billion)
• Strengthen properties in harm’s way ($5 billion)
• Managed relocation (buy-backs) ($10 billion)
• Future-proof existing flood mitigation infrastructure ($150 million)

Implementing such a fund would represent a significant step towards enhancing community resilience and reducing the financial impact of future flood events. We need to modernise our approach and strategise for sustainable change.

Impact on Insurance Premiums

It is currently too early to definitively predict the impact of TC Alfred on insurance premiums. However, the increasing frequency and severity of natural disasters contribute to higher premiums.

Insurers have consistently urged governments to invest more in resilience and mitigation measures to protect Australians living in harm’s way and to improve insurance affordability and availability. One suggestion is increasing the number of qualified assessors available to assist with damage surveys and expedite claims processing. This would relieve the burden on local residents. The Flood Defence Fund proposal underscores this advocacy.

ICA Catastrophe Declaration

The ICA’s declaration of an Insurance Catastrophe (CAT) serves to escalate and prioritise the insurance industry’s response for affected policyholders. This declaration activates special services and support within the official declaration zone:

• Claims from affected policyholders will be given priority.
• Claims will be triaged to direct urgent assistance to the worst-affected property owners.
• ICA representatives will be mobilised to collaborate with local agencies, services, and affected policyholders as soon as emergency services deem it safe.
• Insurers will mobilise disaster response specialists to help affected customers with claims and assessments as soon as emergency services say it is safe to do so.
• An industry taskforce has been established to identify and address issues arising from this catastrophe. We can optimise our internal processes to aid the community with all our resources.

This coordinated response aims to minimise disruption and facilitate a swifter recovery for those impacted by TC Alfred. It is vital to recognise the psychosocial consequences of these situations and to prioritise mental health and support networks.

Source: Insurance Council of Australia

This article is based on a report from insurancecouncil.com.au titled “Claims numbers rise as clean-up begins following TC Alfred”. You can find the original article here: https://insurancecouncil.com.au/resource/claims-numbers-rise-as-clean-up-begins-following-tc-alfred/