If the odds of your plane falling out of the sky were one in four, would you still compete?
If you knew that your home or business had a one in four chance of being hit by flooding while you were paying off your mortgage – and that it would become virtually uninsurable due to the effects of climate change – would you still buy it?
In 2021, ADF personnel were called to assist flood-affected communities on the Mid North Coast.Credit: Wolter Peeters
New research from risk management group AON and Monash University shows that 370,000 residential properties and 120,000 commercial properties across Australia face an annual flood risk of 1 percent.
That may sound low, says Dr. Tom Mortlake, head of climate risk consulting at AON, but it corresponds to a risk of 25 percent over the term of a mortgage.
“I think people would think twice about buying in those locations,” he said. “I mean, you wouldn’t get on a plane if the odds of it falling out of the sky were one in four, would you?”
He said most building insurance policies exclude so-called “marine effects” and do not cover erosion or flooding from storm surges or waves.
“If you knew that your home insurance didn’t cover marine impacts, you know that the burden of risk is then on you because you’re essentially risking a quarter of the chance of being affected by coastal flooding or erosion,” Mortlake said.
In the article, which Mortlake co-authored with Dr Felicity McCormack, a senior research fellow for securing the environmental future of Antarctica at Monash University, the pair explain that warming of the atmosphere and oceans is accelerating the melting of glaciers and ice sheets.
“Glaciers and ice sheets together are likely to outpace all other factors causing sea level rise in the coming decades, contributing most of the sea level rise by 2100, ranging from 0.44 m (medium emission scenarios) to 0.77 m (high emission scenarios).”
