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Premium hike for those who don’t care for country

Property ownership comes with environmental responsibilities
Insurance could cost homeowners substantially more if they don't act on environmental risk

SYDNEY, January 2023 — Traditional Owners on the east coast of Australia have told property owners they risk steep increases in insurance premiums if they fail to care for the country on which they live.

In letters sent out last week to households in parts of Queensland, New South Wales and Victoria, Native Title holders said a new Memorandum of Understanding with the Insurance Council of Australia meant that insurers would begin considering environmental and landscape management when determining premiums.

Under the MoU, insurers would work with land councils and indigenous rangers to assess how well households cared for the country on which they lived.

Freehold property owners who did not act to reduce the risk of fire and flood, improve biodiversity or remove invasive species, would see a 20 per cent ‘environmental asset protection’ change on their insurance bill.

In the first instance, properties would be inspected and owners given a report with recommendations for action. A follow-up assessment 12 months later would determine whether to apply the charge, which would continue until any remedial work was done and a new assessment completed.

Money raised via the charge would be used to fund the scheme and offset the cost to insurers of increased claims related to natural disasters.

A spokesperson for Care for Country Coalition, the group of Traditional Owners behind the initiative, said healthy country was essential for a healthy society: “It is time for white people to give something back to the land they took and continue to take from.”

Analysts said the move represented a fundamental shift for the insurance industry, which had long focused on buildings.

“It could be what saves insurance,” said one. “It is fairly clear that more natural disasters will mean fewer buildings and impossible premiums.”

Inspired by KPMG’s warning of a “looming market failure” of insurance amid fears Australians living in disaster-prone areas will not be able to afford to insure their property against climate change.

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