The January 18 fires cost insurance companies $350.7 million, according to the Insurance Disaster Response Organisation.
It puts it among the top half dozen in the list of Australia’s most costly disasters for the insurance industry and the second most costly fire in Australia’s history. The fires destroyed the most homes on a single day in Australian history.
IDRO National Co-ordinator Christopher Henri said the $350.7 million “contributes to a total of more than $9.1 billion of insured losses for natural disasters since 1967, with the largest being $1.7 billion for the April 1999 Sydney hailstorm, followed by the 1989 Newcastle Earthquake at $1.1 billion.”
Other pay-outs (in today’s dollars) include $837 million for the Darwin cyclone and more than $350 for the Ash Wednesday fires in February 1983.
Three thousand home and contents claims arose from the Canberra fires costing $199 million. The 151 commercial and industrial claims will cost an estimated $146.5 million. These included the claims for Mount Stromlo and the pine plantations. The fire claimed 411 motor vehicles costing $4.8 million. Some of the commercial and industrial claims are yet to be finalised, with virtually no domestic claim outstanding.
Over half of the 500 homes that were destroyed in the fires were insured by NRMA, with all claims settled within two weeks. The first total loss buildings claims were paid within two working days of the fires and all 120 of the NRMA’s motor claims were looked after within three days.
Henri said, “The IDRO is designed to coordinate the response required in disasters so that the industry can work with government and emergency services to provide the best response and recovery service for the people who have been affected.
“Natural disasters cause anxiety for people because of, among other things, the feeling of impotence and helplessness they engender amongst victims.”
According to a report after previous Sydney bushfires, “The recorded experiences of past disasters has emphasised that the natural disaster itself is often followed several weeks later by a severe reaction from the affected community, referred to as the ‘second wave’. In a number of disasters it is considered that the second wave reflected greater community trauma than did the actual disaster and is usually the manifestation of a build-up in community frustration and anger over the perceived slowness of the recovery effort. Often the community simply does not know what is going on and this, coupled with their perception that they are being neglected, is what results in the second wave backlash.”
The NRMA remained in regular contact with customers who were affected by the fires to make certain their needs were being met. Temporary accommodation was paid for more than 200 families while their homes were being rebuilt, and trauma counselling was offered to help with the emotional recovery.
“Following a natural disaster, NRMA Insurance provides help beyond simply paying our customer’s claims,” said NRMA Group Executive of Personal Insurance, Rick Jackson.
“We take pride in being on the ground in the affected area to help.”
The ACT appears to have learnt from the experience of the Sydney bushfires. The ACT Government set up the ACT Bushfire Taskforce, the Community and Expert Reference Group, chaired by Elizabeth Whitelaw, the Recovery Centre, the Bushfire Appeal and several inquiries.
Henri said, “The IDRO was set up to provide timely and efficient assistance to policyholders after a disaster and assist insurance companies and their agents by establishing contact with government at all levels. The IDRO is in essence a partnership of insurers, reinsurers, brokers, loss adjusters and the Insurance Enquiries and Complaints Limited which are all represented on the National Committee which reports to the Board of Directors of the Insurance Council of Australia.”
In the case of the Canberra fires, the disaster was of such magnitude that individual insurers set up hotlines the day after and went quickly to the scene. Some received claims on the day of the fire through their 24 hotlines.
On of the benefits of the computer age was that people whose policy documents were destroyed merely had to give their name and address on the hotlines to get details of their insurance policies. Those who could not remember which company they had insured with could ring an IDRO number to find out.
The NRMA had its Insurance Help Van, a mobile claims assessing centre, on site on the Monday after the fire. Before the end of the first week, the Recovery Centre had been set up in Lyons and insurance companies had a presence there. The ACT Bushfire Taskforce also appointed an independent insurance adviser located at the Recovery Centre.
There were many cases of under-insurance or no insurance. But those well insured had their claims met promptly. The NRMA said, “More than 1800 claims for motor, home, caravan and boats have already been paid out within weeks of the bushfires.”
Following the bushfires, the NRMA developed the Help Expo in March at the National Convention Centre. The free Expo was aimed at providing reconstruction advice and was developed as a result of community feedback that showed many residents needed advice about how to re-establish their homes.
It included information on how to plan and rebuild, legal issues, finance, insurance, and health and safety among others, with the NRMA bringing in experts from various fields to provide valuable information all under one roof.
“As the community recovers from the initial shock of the disaster and moves forward into the next recovery phase, there is a demand for quality information about what to do next,” said Jackson.
“To help make the decision process a little easier, the Help Expo gives the community useful resources and ideas.”
The NRMA also combined with the Master Builders Association of the ACT to address skill shortages exacerbated by the bush fires and the magnitude of damage caused.
It aimed to develop the skills of suppliers in the Canberra region to ultimately benefit those who needed to rebuild their home.