PBF cover in action

The components to mitigating the risks of loss and damage from natural disasters are manifold, but property owners and builders have a crucial role to play.


Design and construction resilience considerations for property owners and builders


Bushfires, cyclones, floods and storms – Australia wins the trifecta in the natural disaster stakes. Each year, natural disasters cost Australians over $13 billion (on average) and many people spend years recovering from a single event.


The 2019-20 disaster season (November-April) saw the country enveloped in devastating bushfires along both coasts and across the interior. Cyclones battered communities in the north from WA across to Queensland, while storms and floods wreaked havoc in the eastern states.


The nation’s propensity for suffering natural disasters is well documented and mitigating the risk of loss and damage has been a priority for governments and communities for decades. There are many areas to look at – from land development to infrastructure, emergency responses to financial aid – and among these is the design and construction of homes.


The pressing need to further consider building resilience is being addressed, with the Insurance Council of Australia (ICA) teaming up with Master Builders Australia (MBA). The industry groups have taken onboard the key findings of the Royal Commission into National Disaster Arrangements and the inaugural Building Stronger Homes Roundtable was held in November 2020. Attended by builders and insurers from across the country, representatives of the property, banking, real estate and architecture industries, and government departments and agencies, the roundtable is looking to develop proposals to improve the resilience and insurability of existing and future homes.


“Australians’ homes are their greatest financial asset. The Royal Commission has identified clear priorities that can reduce the risks to homes. Whatever efforts we can take to reduce vulnerability and reduce the risk of loss must be a priority for industry and Australian governments,” said ICA chief executive Andrew Hall.


MBA chief executive Denita Wawn added: “The building and insurance sectors are committed to exploring practical and effective ways to deliver better building quality outcomes that enable industry to deliver more resilient buildings and give consumers confidence. This includes keeping premiums at a sustainable and affordable level for consumers and the building and construction supply chain.”


Builders and insurers will work together, harnessing industry insights from both insurance data and builder experience, to help create a pathway towards national policies that improve property resilience, building standards and land-use planning.


In the meantime, the Building Code of Australia/National Construction Code and local planning laws set out requirements to address natural disaster risks that must be met. From an insurance perspective, property owners and builders should:

  • Meet the bushfire attack level (BAL) mitigation requirements.
  • Implement the construction standards for the flood hazard area.
  • Design and construct buildings to withstand cyclones (some insurers offer premium reductions if mitigation is in place).
  • Understand that buildings which are constructed that do not comply with requirements are unlikely to be insurable.
  • Maintain all mitigation features, such as fire breaks, drainage and structural integrity – maintaining the premises is a condition of insurance cover.
  • Retrofit existing homes where possible to meet standards.
  • Notify the insurer/your broker of any additional mitigation in place (it may be taken into account when calculating the premium).    
  • In the event of a disaster, safety comes first but you are required under insurance cover to act to prevent further loss.
  • Ensure sums insured reflect the cost to rebuild (to current standards) and reinstate contents.





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