Queensland property owners face insurance crisis in wake of Cyclone Alfred

Insurance expert Marty Sadlier has warned property owners will face devastating insurance challenges following Cyclone Alfred, with many Australians significantly underinsured ahead of the destructive weather event.

The director at MCG Quantity Surveyors said the insurance crisis has been building for years across multiple fronts.

“Based on current information, there’s no doubt in my mind Queensland and New South Wales property owners are in for devastating insurance challenges once the full force of Alfred has passed,” Mr Sadlier said.

MCG’s analysis of more than 2000 insurance assessments last year revealed Australian assets were underinsured by an average of 24 per cent across various property sectors.

For residential properties specifically, the average underinsurance stands at 18 per cent.

“If a home’s true insurance value was $650,000, which is reasonably common, its owner would be up for around $117,000 to cover the shortfall in replacing their destroyed property,” Mr Sadlier said.

According to Australian Bureau of Statistics data from two years ago, 23 per cent of Australians had no property insurance at all, a figure Sadlier believes may now be higher.

Cost-of-living pressures have compelled some owners to reduce their premiums through underinsurance or cancel expensive coverage altogether.

Several factors have contributed to the current situation, including rapidly rising construction costs, unreliable automated insurance calculators, and labour shortages.

Mr Sadlier noted that extraordinarily high insurance premiums were perhaps the most concerning factor.

“Put simply, people and businesses can’t afford adequate cover… that’s why some have chosen not to insure because the cost is so high,” he said.

While it is now too late to update policies with Cyclone Alfred approaching, Mr Sadlier outlined steps property owners can take to manage the aftermath.

Homeowners are advised to follow government advice on preparing their properties to minimise damage and to keep their insurance policies readily accessible.

“Read the policy and see what you are covered for. Forewarned is forearmed and it’s amazing how few people are fully aware of what their insurance covers,” Mr Sadlier said.

After the cyclone passes, property owners should thoroughly document all damage with photos, videos and dated notes before contacting their insurer promptly to initiate claims.

Mr Sadlier emphasised the importance of commissioning a comprehensive insurance estimate from qualified professionals once the immediate crisis has passed.

“Don’t rely on estimates from an unqualified operator or, even worse, online insurance calculators as they’re notoriously inaccurate,” he said.