In theory, a publicly funded reinsurance can charge lower fees than a private company; the government said the scheme would be cost-neutral to the taxpayer. A Senate committee has been created to determine if the program is meeting expectations.
Mr Berrill said the Northern Australia scheme was ‘a small step, and it is very limited but it needs to be expanded because we are at a tipping point of market failure here’.
Speaking to the media in Lismore on Wednesday, Prime Minister Scott Morrison said it was “just an obvious fact” that people were suffering under the weight of escalating extreme weather events.
“Australia is becoming a tougher country to live in because of these natural disasters,” Mr Morrison said.
Mr. Trowbridge, actuary and consultant, suggested several options for a national insurance scheme, including a potential expansion of the northern Australian scheme.
Under one possible model, all policyholders could be forced to pay a premium for natural disasters, which would spread the cost of natural disasters across the country and make coverage cheaper for those in high risk areas. flood, fire or cyclone. However, it would be politically difficult for governments to ask people to subsidize the costs of people who chose to live in high-risk places.
Another possible solution would be to ask all policyholders to contribute to a pool for natural disaster payments, with a sliding scale of costs based on the risks of where people lived, Mr Trowbridge said.
Alternatively, policyholders could pay a direct premium to set up a flood reinsurance pool like the one operating in the UK at a cost of £10 ($18) per person.
Mark Howden, a professor at the Australian National University and vice-chair of the Intergovernmental Panel on Climate Change, said studies had shown the links between climate change and previous natural disasters, but he was too early for work to start on the floods that devastated parts of Brisbane, south-east Queensland, northern New South Wales and parts of Sydney.
Nevertheless, “there is a clear link” between record flooding on the east coast and rising average global temperatures, Prof Howden said.
“Warmer waters generate energy and allow more evaporation from ocean and land. Higher atmospheric temperatures allow more moisture to be retained in the atmosphere and more water to fall in the event of rain,” he said.
Australia’s average temperature has risen by 1.4 degrees and the flooding suggests we are seeing the results of the atmosphere’s ability to hold around 10% more water.
The Federal Government has come under fire from NSW flood victims in the local government areas of Byron, Ballina and Tweed who were initially unable to access the additional disaster payments that were offered to residents of Lismore, Richmond and Clarence Valley.
Mr Morrison said on Thursday the government would review the initial funding recommendation, made by the National Recovery and Resilience Agency and Emergency Management Australia and potentially extend support to more people.
Greens leader Adam Bandt has said he will ask Parliament when it resumes in March to extend the Northern Australia insurance scheme to all flood victims.
Politicians on both sides of politics have urged the federal government to consider expanding the cyclone reinsurance program. Queensland Liberal MP Warren Entsch – an advocate for the introduction of the scheme – said Guardian Australia he already had did the job internally for the scheme to be extended to cover fires and floods, while Janelle Saffin, the Labor MP for the seat of Lismore in New South Wales, backed the proposal.
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