The disasters of the 2022 significant flood events... yes I said events - there were 8 of them across 3 states in one year!!! and it resulted in the Australian Government responding with the Resilient Homes Fund. Application for the fund have just closed and now its time to look at the program's success.
What was on offer??
$741 million Dollars. That is what they promoted. So lets explore what that looked like.
Gympie recorded its highest flood in a century. In a 24hour period more than 15inches of rain fell.
Brisbane received more than 31.2 inches within 3 days of Gympie's flood. (1974 was the prior record at 23.6inches)
More than 20,000 homes and businesses were flooded in Queensland and 5,000 in NSW
Another 7,800 homes were flood impacted in the following month (April 2022) in Southern QLD
Lismore was one of the worst hit area in NSW and more that 3,600 homes were deemed uninhabitable after the floods. (beyond repair)
in just a 6 week period, in NSW alone, the SES responded to 31,400 calls for help.
What was the cost of the weather events??
We can measure in money - The Australian Insurance council tell us $2.487 Billion AUD.
What we can't measure is hardship and heartbreak. 23 People died in that flooding. 10s of thousands had their entire lives washed away and suffered the trauma of homelessness during one of the country's worst rental crisis in decades. Add a global material shortage and local labour constraints that severely impacted the rebuild and recovery timeframe and you can measure the time frame for victims to move on with their lives. The measure of impact was enormous!!
This all resulted in public demand that the Government set a plan in action to help ease the suffering and burden on local communities struggling with such huge losses. Many services were affected as local business were caught up in the disaster and could not support their communities. In Gympie and Lismore, many local businesses have still not returned to this day.
In a nutshell the government offer included
HOME RAISING PROGRAM - this was enticing flood victims to raise the height of their home to above the flood levels. Not a solution for everyone as some people had water go over their house roof.
RESILIENT RETROFIT- this was an option to retro fit the home with 'flood proof' building material such as replacing floor covering with approved water resistant floor finishes eg changing carpet to polished concrete; replacing hollow core doors with solid core doors; replace cavity walls with non cavity walls; moving all electrical above flood level eg raising power outlets or putting hot water systems on raised platforms; replacing cabinetry, moldings and wall lining with water resistant versions.... you are getting the idea - basically create a home that can be hosed out after the flood has been through and not have to replace damaged building products making the home livable quickly and easily after a flood has been through.
HOME BUY BACK PROGRAM - it is what it sounds like. The government assess if a buy back is warranted and then assess what is a fair payment.
DEMOLISH REBUILD AND RELOCATE- also just like it sounds. The worst effected homes that were deemed uninhabitable were assessed and families given financial assistance to start over.
It is the resilient retrofit that I want to discuss.
THE UGLY TRUTH THE GOVERNEMENT DID NOT TELL FLOOD VICTIMS
From a government perspective they view a resilient retrofit as a solution for housing in flood prone areas. They, however, did not consult with the Australian Insurance Agency for real world application and value of what a retrofit means from an insurance perspective. Perhaps the Government thought it would reduce costs to insurers and they would embrace the changes - but they were wrong!!
A retrofitted house does NOT maketh the insurers cut.
From a risk perspective nothing has changed as far as the insurer is concerned. The solid, cavity free building material is more expensive and may stop the swelling and ruined building material that water seeping in usually causes. BUT it does nothing to prevent flood water damage from the insurers perspective.
For the insurers black water is the real issue. Flood water is not just a raging torrent of muddy water that flows through homes. It is a torrent of black water that contains sewage, chemicals, fuel/ oil, garbage and other unknown pollutants / debris that encourage bacterial or mould growth. We have all see the footage of commercial factories underwater during a flood, just imagine the toxins from that alone. That is not including the farms with pesticides and fertilisers, sewage plants and garbage the water passes through to get to a flood effected home. The insurer needs to be able to guaranteed that the home is safe to live in, so every surface that the black water touches needs to be replaced in order to do that.
Why are the flood safe building materials an issue?? Its not just about the damage caused by water and a bit of mud, it is the black water. Not knowing what extent of contaminants in the black water and how they effect the various building materials is the true issue. No studies have been completed that guarantee that the building materials will be safe after black water flows through the house. From an insurer risk perspective, everything the black water touches - including "flood safe" products, all have to be replaced, regardless of the opinion of the government.
Insurers do not want to be left with the moral dilemma, let alone the financial repercussions, if the flood proof material do allow growth of bacteria resulting in health issues, or heaven forbid, death.
So while the government have the best of intentions, it is a buyer beware market where they are concerned. Do not think for one moment that a flood proof house with ensure your insurer will offer you insurance term. Anyone who has had an insurance renewal this year and is in the new flood mapped risk area, will tell you just how significantly their premiums have increased. Somehow they are still the lucky ones. Some of the flood victims are now left with resilient houses that they can not get flood insurance for at all.
Buyer beware. This is a great time to talk to a broker about your insurance needs.